Oil prices rose on Monday after the United States vowed to continue attacking Yemen’s Houthis until the Iran-aligned group ends its attacks on navigation.
Brent crude futures rose 56 cents, or 0.8%, to $71.14 a barrel, while U.S. West Texas Intermediate crude futures rose 56 cents, or 0.8%, to $67.74 a barrel.
The U.S. airstrikes, which the Houthi-affiliated Health Ministry said killed at least 53 people, are the largest U.S. military operation in the Middle East since President Donald Trump took office in January.
A U.S. official told the campaign could last for weeks.
Houthi attacks on Red Sea shipping have disrupted global trade and launched a costly campaign by the U.S. military to intercept missiles and drones.
Oil prices rose slightly last week, ending a three-week losing streak fueled by concerns about a global economic slowdown caused by escalating trade tensions between the United States and other countries.
Both benchmarks reversed some of their gains after rising more than 1% in early Asian trade, as China reported a mixed start to the year. Government data on Monday showed industrial production slowed in January and February, while retail sales growth accelerated slightly.
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 wave of U.S. tariffs on China, one of its main trading partners.
This effort threatened to destabilize the global trading system. Bjarne Schildrup, senior commodities analyst at research firm SEB, said: “The oil market is in a state of balance between the negative effects of Trump’s tariffs and the positive effects of China’s stimulus measures.”
Oil prices rise on Chinese stimulus plan
West Texas Intermediate (WTI), the NYMEX futures, hit a new weekly high of $68.00 during European trading hours on Monday. The price of oil rose on hopes that China’s new monetary stimulus plan would boost domestic consumption.
China’s ministry on Sunday announced a comprehensive “special action plan” to boost economic growth. The ministry said the plan focuses on increasing the population’s income, easing financial burdens and improving the consumption environment, according to a Reuters report.
This scenario is favorable for the price of oil, given that China is the world’s largest oil importer. Meanwhile, upbeat Chinese retail sales data for February helped support the price of oil. Retail sales data, a key measure of consumer spending, rose 4 percent, as expected.
Future investors are focused on U.S. President Donald Trump’s talks with Russian President Vladimir Putin on Tuesday to discuss a temporary ceasefire with Ukraine. Ukraine agreed last week to a 30-day ceasefire after talks with U.S. officials in Saudi Arabia.
This week investors will also focus on the Federal Reserve’s monetary policy decision, which will be announced on Wednesday. The Federal Reserve will almost certainly keep interest rates steady in the range of 4.25%-4.50% for the second time in a row.
“We lower our forecast for the price of Brent for December 2025 by $5 to $71 per barrel (WTI to $67), the Brent range to $65 to $80, and our average forecast for 2026 to $68 for Brent (WTI to $64).)”.
Analysts said oil demand is expected to grow at a slower pace than previously expected, while supply from the Organization of the Petroleum Exporting Countries and its OPEC+ allies is expected to exceed expectations.
Goldman Sachs lowers oil price forecast to $60
Goldman Sachs joined other banks on Monday in lowering its forecast for oil prices, as Wall Street increasingly expects the price of crude oil to be in the range of $60 a barrel.
Also Goldman initially insisted on its previous forecast for oil prices when OPEC Plus confirmed its plans to increase oil production earlier this month, but as pressure mounted on U.S. economic growth, the bank lowered its oil price forecast in a note. He lowered his forecast range for Brent crude from $70 to $85 per barrel to $65-80.
Dan Stroeven, head of commodity research, wrote: “We expect Brent crude to remain above $70 a barrel in the coming months,” but “we no longer see $70 as the minimum price.” Brent crude futures are currently around $71.
Goldman’s reshuffle follows cuts in recent weeks from Morgan Stanley and Bank of America, both of which expect Brent crude to reach around $60 a barrel in the second half of the year.
Citigroup, JPMorgan Chase and partners have long predicted prices to end the year at the middle or low of $60 per barrel. Beyond Wall Street, oil majors, such as Vitol Group and Gonfort Group — who have been optimistic about crude oil in recent years — have also become more pessimistic.
US President Donald Trump has welcomed the drop in oil prices, providing relief to consumers and central banks after years of hyperinflation. However, it poses financial risks to producers in the U.S. shale industry and to the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia.
Wall Street’s preliminary valuations for next year suggest little room for growth, with JPMorgan expecting crude oil to average $61 per barrel — and possibly touching $50 as Trump seeks to keep sanctioned Russian and Iranian oil barrels in the market.
