(Reuters) – Oil prices rose on Tuesday as China’s economy grew faster than expected, while heightened tensions in the Middle East also kept markets on edge after Israel announced it would it would respond to the weekend’s Iranian missile and drone attack.
Brent crude futures for June delivery rose 48 cents, or 0.5 percent, to $90.58 a barrel at 0437 GMT. U.S. crude futures for May delivery rose 49 cents, or 0.6%, to $85.90 a barrel.
Benchmark indexes rose on strong economic growth in China, the world’s largest oil importer. Official gross domestic product rose 5.3% in the first quarter from a year earlier, according to government data, well above analysts’ expectations.
While the growth is seen as a welcome sign for policymakers trying to boost confidence, a range of other indicators, including property investment, retail sales and industrial production, show demand remains weak in the face of a prolonged real estate crisis.
Oil prices climbed last week to their highest levels since October, but fell on Monday after the Iranian attacks, which the Iranian government called retaliation for an airstrike on its consulate in Damascus, caused only modest damage.
“Israel’s response will determine whether the escalation ends or continues. The conflict may still be limited to Israel, Iran and its proxies, with possible U.S. involvement,” analysts said Tuesday from ANZ Research in a note.
Israeli Prime Minister Benjamin Netanyahu convened his war cabinet on Monday for the second time in less than 24 hours to consider how to respond to Iran’s first-ever direct attack on Israel.
Iran produces more than 3 million barrels per day of crude oil as a major producer in the Organization of the Petroleum Exporting Countries (OPEC).
(Reporting by Laura Sanicola in Washington and Sudarshan Varadhan in Singapore; Editing by Jamie Freed and Lincoln Feast)
