West Texas Intermediate (WTI) crude futures jumped 1.8 percent to $68.09 per barrel
Oil prices jumped on Monday, buoyed by prospects of trade disruptions, after the U.S. vowed to continue strikes against Yemen’s Houthis until their attacks ceased. Sentiment was further lifted by China’s announcement of a special action plan aimed at boosting domestic consumption.
Brent Oil Futures expiring in May rose 1.6 percent to $71.73 per barrel as of 21:12 ET (01:12 GMT), while West Texas Intermediate (WTI) crude futures jumped 1.8 percent to $68.09 per barrel. Both contracts ended little changed last week amid escalating trade tensions.
U.S. vows to keep striking Houthis until shipping attacks stop
The U.S. administration has intensified its military operations against Yemen’s Iran-backed Houthi rebels, with Defense Secretary Pete Hegseth announcing that airstrikes will continue indefinitely until the Houthis cease their attacks on U.S. ships and drones. This escalation follows initial strikes that resulted in significant casualties among Houthi forces.
The Houthis have a history of targeting commercial vessels in the Red Sea, a crucial corridor for global commerce, accounting for about 15 percent of the world’s shipping traffic. The heightened conflict has raised concerns over potential disruptions to vital shipping routes in the Red Sea, leading to a notable impact on global oil markets.
The ongoing hostilities could threaten the security of maritime trade in the region, thereby tightening oil supplies.
Read more: Oil prices rise to $70.35 as Ukraine ceasefire deal prospects diminish
China announces special plan to boost consumption
China unveiled on Sunday a comprehensive plan aimed at boosting domestic consumption, signaling a strategic shift to make internal demand the primary engine of economic growth. The plan outlines measures to increase residents’ income, reduce financial burdens, and enhance the consumption environment to stimulate spending.
Key initiatives include promoting reasonable wage growth, expanding property income channels, and exploring ways to unlock the value of rural housing through rental arrangements and cooperative models. The plan also emphasizes the development and application of new technologies and products, such as autonomous driving and smart wearables, to create new high-growth consumption sectors.
The prospect of increased domestic consumption in the biggest oil importer, China—particularly in sectors like automobiles and technology—suggests a potential rise in energy demand. This anticipated surge in consumption has contributed to a boost in oil prices. For the day, investors were awaiting China’s monthly industrial production and retail sales data to gauge the growth of the world’s second-largest economy.
