Oil prices rose for the second consecutive day after China, the world’s top importer, announced plans to stimulate consumption by increasing incomes, while the United States ordered fresh military strikes on the Houthis in Yemen. Brent crude surpassed $71 a barrel, climbing 1% on Friday, while West Texas Intermediate (WTI) approached $68. China reported that Beijing will soon unveil measures aimed at stabilizing the stock and real estate markets, boosting wages, and addressing the country’s low birth rate.
In the Middle East, US military action against the Houthi militants in Yemen has been ramped up. Pentagon chief Pete Hegseth stated on Sunday that military strikes would continue “unrelenting” until the group halts its attacks on civilian and military vessels in the Red Sea. This came after President Donald Trump authorized an attack on Houthi-controlled locations in Yemen the previous day.
Despite the recent gains, crude prices have fallen more than $10 a barrel from January’s high. A combination of factors, including the escalating US-China trade war, an OPEC+ decision to increase oil production, and the possibility of an end to the war in Ukraine, has weighed on prices. US President Trump is expected to speak with Russian President Vladimir Putin this week as Washington seeks a resolution to the ongoing conflict in Ukraine.
The bearish outlook has led Goldman Sachs to revise its Brent crude price forecast. Analysts, including Daan Struyven, stated in a note on Sunday that the investment bank had lowered its December 2025 forecast for Brent by $5 to $71 a barrel. Goldman also warned that the potential escalation of tariffs and longer-term increases in OPEC+ production could further suppress prices.
While the medium-term risks to oil prices remain skewed to the downside, Goldman Sachs suggested that oil prices could see a “modest” recovery in the short term, driven by resilient US economic growth and the continued impact of sanctions on Russia.
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