Singapore — Oil prices traded higher on Monday after the United States vowed to keep attacking Yemen’s Houthis until the Iran-aligned group ends its assaults on shipping.
Brent futures rose 56 cents, or 0.8%, to $71.14 a barrel by 0800 GMT, while U.S. West Texas Intermediate crude futures rose 56 cents, also 0.8%, to $67.74 a barrel.
The U.S. airstrikes, which the Houthi-run health ministry said killed at least 53 people, are the biggest U.S. military operation in the Middle East since President Donald Trump took office in January.
One U.S. official told Reuters the campaign might run for weeks.
Houthi attacks on shipping in the Red Sea have disrupted global commerce and set off a costly campaign by the U.S. military to intercept missiles and drones.
Oil prices rose slightly last week, snapping a three-week losing streak fed by concern over a global economic slowdown driven by escalating trade tension between the U.S. and other nations.
Both benchmarks pared some gains after rising more than 1% in early Asian trade as China reported a mixed start to the year. Industrial output slowed in January-February, while retail sales growth accelerated slightly, government data showed on Monday.
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The state council, or cabinet, unveiled what it called a “special action plan” on Sunday in a bid to boost domestic consumption and economic recovery amid a burst of U.S. trade tariffs against China, among key trading partners.
That effort has threatened to upset the global trade order.
“The oil market is thus in a balance between the negative effects of Trump’s tariffs versus the positive effects of Chinese stimulative measures,” said Bjarne Schieldrop, chief commodities analyst at SEB Research.
“It seems that the positive political signals from China on stimulus there is set to lift Brent crude up and out of the depressed range it has traded in over the past 8-9 trading days,” Schieldrop said in a note on Monday.
Analysts at Goldman Sachs cut oil price forecasts, saying they expected the U.S. economy to grow slower than expected, due to the tariffs imposed on countries such as Canada, China and Mexico.
“We reduce by $5 our December 2025 forecast for Brent to $71/bbl (WTI to $67), our Brent range to $65 to $80, and our 2026 average forecast to $68 for Brent (WTI to $64),” the analysts said in a note.
Oil demand was expected to grow at a slower pace than previously expected, while supply from the Organization of Petroleum Exporting Countries and its allies (OPEC+) was expected to exceed forecasts, the Goldman analysts said.
*Sudarshan Varadhan; editing: Christopher Cushing & Ros Russell – Reuters
