Oil prices moved modestly higher on Tuesday, supported by stronger-than-expected economic data from China. However, gains remained capped as investors stayed cautious following fresh trade tariff threats from the administration of Donald Trump against several European countries over the issue of Greenland’s ownership.
At 08:05 ET (13:05 GMT), Brent crude futures for March delivery advanced 0.8% to $64.41 a barrel, while West Texas Intermediate (WTI) crude also climbed 0.8% to $59.83 per barrel. Both benchmarks rebounded after no settlement was recorded on Monday.
China’s economy shows resilience
Data released on Monday showed that China’s economy expanded slightly more than anticipated in the fourth quarter of 2025, helped by government stimulus measures and a gradual recovery in domestic consumption. The stronger performance allowed the country to meet its annual growth objective set by Beijing.
Gross domestic product rose 1.2% quarter-on-quarter in the three months ending December 31, beating market expectations of 1.1%. As a result, China’s full-year GDP growth for 2025 reached 5%, in line with the government’s target for a third consecutive year, despite lingering post-pandemic challenges and elevated U.S.-China trade tensions.
Government figures also showed that China’s refinery throughput increased 4.1% year-on-year in 2025, while crude oil production rose 1.5%, with both reaching record highs. As the world’s largest crude oil importer, signs of economic stabilization in China could help support global oil demand at a time when markets are grappling with excess supply.
Trump-Greenland tariff threats unsettle markets
Oil markets experienced sharp volatility on Monday after President Trump threatened to impose tariffs on major European economies unless an agreement is reached to transfer control of Greenland to the United States.
The president warned that tariffs of up to 25% could be levied on countries including France, Denmark, and the United Kingdom, and did not rule out the use of military force in relation to Greenland. Trump has repeatedly argued that U.S. control of Greenland is critical for national security, and his recent actions in Venezuela have added to broader market unease over potential geopolitical escalation.
IEA report and U.S. inventories awaited
Beyond geopolitical developments, market attention this week is focused on the upcoming monthly report from the International Energy Agency, scheduled for release on Wednesday.
Traders will be looking for updated guidance on global oil supply, especially after the agency repeatedly warned of a possible supply surplus emerging in 2026. The report is also expected to include longer-term forecasts extending into 2027.
The IEA’s outlook follows a recent monthly report from the OPEC, which offered a more optimistic view on oil demand growth for 2026 and 2027. In addition, upcoming data on U.S. crude inventories is likely to provide further insight into supply and demand conditions in the world’s largest oil-producing nation.
