Oil surges on Tuesday’s opening

Oil surged on Tuesday as China’s economy outpaced expectations and affected by tensions in the Middle East, as per a Reuters report on Tuesday.

Brent futures for June delivery gained 0.2 per cent, reaching $90.30 per barrel, while US crude futures for May delivery climbed 0.3 per cent to $85.62 per barrel by 0757 GMT.

Analysts had anticipated a brief uptick in prices this morning. Earlier, oil prices had jumped nearly 1 per cent following China’s announcement of a 5.3 per cent year on year (YoY) growth in gross domestic product for the first quarter, surpassing analysts’ forecasts. However, gains were tempered as other Chinese economic indicators, such as real estate investment, retail sales, and industrial output, revealed ongoing weakness amid a prolonged property crisis.

Despite reaching their highest levels since October last week, oil prices retreated on Monday as the tension between Israel and Iran picked up, alleviating concerns of a rapid escalation in conflict that could disrupt crude supply.

Analysts at ANZ Research emphasised that Israel’s response would dictate the trajectory of the situation, with the potential for the conflict to remain localised between Israel-Iran, and Israel’s allies possibly involving the United States.

It’s noteworthy that Iran, a key member of the Organisation of the Petroleum Exporting Countries (OPEC+), produces over 3 million barrels of crude oil per day.