Oil prices are climbing, but remain near a two-week low! Weak economic data from a major importer and rising temperatures are raising concerns about demand. Will this trend continue, or i...

Oil prices have increased but remain near a two-week low due to weak economic data from China and forecasts of warmer weather in other countries, which have worsened demand outlooks.

According to Reuters.

Brent crude rose by 60 cents, or 0.78%. The oil grade is trading at $77.68 per barrel. U.S. crude WTI increased by 50 cents, or 0.68%, with prices fluctuating around $73.67 per barrel.

China, the world's largest importer of crude oil, reported an unexpected contraction in manufacturing activity for January on Monday, raising concerns about the growth of global demand for crude oil, as noted by Reuters.

"The overall tone of caution amid risk factors, combined with weaker PMI readings in China that cast doubt on oil demand prospects there, may hinder oil prices," said IG analyst Yip Jun Rong.

The agency predicts that crude oil demand in China will also be impacted by the recent U.S. sanctions on Russian oil trade. FGE analysts believe that refineries in Shandong could lose up to 1 million barrels per day of crude oil supply due to a ban imposed by Shandong Port Group on tankers under U.S. sanctions.

Several independent refineries in China have halted operations or plan to do so for an indefinite maintenance period, Reuters sources reported, as the plants face losses due to new Chinese tariffs and tax policies.

India, the world's third-largest importer of crude oil, is also facing disruptions in Russian oil supplies, but local refiners are taking advantage of the easing sanctions period to make purchases ahead of March, according to FGE analysts.

In the U.S., weather forecasts for this week indicate temperatures above normal, negatively impacting heating fuel demand following extreme cold that triggered rallies in natural gas and diesel prices in previous sessions.

"Temperatures in both regions (the U.S. and Europe) are rising, which helps to somewhat reduce heating fuel demand," said oil analyst Alex Hodes from StoneX on Monday, January 27.

Background. Previously, Mind reported that oil prices at the beginning of the year were poised for a weekly increase after closing at a two-month high in the previous session, supported by expectations of further economic stimulus in China and a decline in interest rates in the U.S.