Oil prices rose on Monday as positive manufacturing data from China, the world’s largest crude importer, sparked renewed optimism for fuel demand. However, uncertainties regarding a Ukraine peace deal and potential U.S. tariffs on global economic growth persisted.

Brent crude increased by 36 cents, or 0.5%, to $73.17 a barrel by 0439 GMT, while U.S. West Texas Intermediate crude rose 34 cents, or 0.5%, to $70.10 a barrel. The price increase followed official data indicating that China’s manufacturing activity expanded at its fastest pace in three months in February, driven by new orders and higher purchase volumes.

Investors are closely watching China’s annual parliamentary meeting, starting March 5, for additional measures to support the economy. Market analyst Tony Sycamore noted that the China NBS manufacturing PMI moving into expansionary territory could be a factor in rising prices. However, he warned that the economic outlook may remain uncertain due to upcoming U.S. tariffs on Chinese exports starting March 4.

Goldman Sachs analysts were more optimistic, suggesting the data indicates stable to slightly improved economic activity in China in early 2025. However, the imposition of an extra 10% U.S. tariff could lead to retaliatory measures.

Last month, both Brent and WTI experienced their first monthly declines in three months as the threat of tariffs from the U.S. and its trade partners shook investor confidence in global economic growth and reduced appetite for riskier assets.

Sentiment improved after a summit where European leaders strongly supported Ukrainian President Volodymyr Zelenskiy and promised more aid. Zelenskiy expressed optimism about salvaging his relationship with U.S. President Donald Trump and signing a minerals deal with the U.S.

ING analysts noted that the U.S. stance on a peace deal seems more distant, altering energy market hopes for an easing of sanctions. Ongoing attacks on Russian refineries have raised concerns about refined products exports, with another plant in Ufa reportedly on fire.

For 2025, analysts maintain their oil price forecasts, with Brent averaging $74.63 a barrel, expecting any impact from further U.S. sanctions to be balanced by ample supply and a possible peace deal between Russia and Ukraine.

Despite U.S. urging, eight international oil firms in Iraq’s Kurdistan region announced they would not restart exports through Turkey’s port of Ceyhan due to unclear commercial agreements and payment guarantees.