Oil prices stabilized after a recent increase of two days, with attention on China's economy and geopolitical risks in the Middle East. Brent crude was trading near $71 per barrel, following a 1.7% rise in the last two sessions, while West Texas Intermediate was above $67. Positive indications were observed from the top two crude consumers globally as China planned actions to boost consumption and US retail sales surpassed expectations, albeit showing a slight slowdown.

Geopolitical tensions remained prominent as US President Donald Trump stated that attacks by Yemen's Houthis on Red Sea shipping would be seen similarly to direct provocations by Iran. Prior to the recent escalation, where US forces targeted the rebels, the US administration had been increasing sanctions on Iran's energy sector.

Despite a decrease of around $12 from its peak in January, crude oil faced various bearish factors. The ongoing global trade conflict posed a threat to demand, while OPEC and its partners were preparing to increase production from April. Additionally, the global market was expected to experience an oversupply, as indicated by the International Energy Agency.

The impact of reduced global crude supply due to US actions against Iran could potentially offset the gains from OPEC's planned production increases, resulting in a reduction of up to 1 million barrels per day, according to analysts at ANZ Group Holdings Ltd., Brian Martin, and Daniel Hynes. Presently, fundamental indicators reflect slightly improved market conditions. The differences between contract months, known as timespreads, have recently widened, with Brent's three-month spread at $1.38 per barrel in backwardation, compared to a low of $1.08 earlier in the month.