Oil prices were trading higher on Monday after the United States vowed to keep up attacks on Yemen's Houthis until the Iran-aligned group ends its attacks on shipping.

Brent crude futures rose 56 cents, or 0.8%, to $71.14 a barrel by 0800 GMT, while U.S. West Texas Intermediate crude futures rose 56 cents, also 0.8%, to $67.74 a barrel.

The U.S. airstrikes, which the Houthi-led health ministry said killed at least 53 people, were the largest U.S. military operation in the Middle East since President Donald Trump took office in January.

A U.S. official told Reuters the campaign could last for weeks. The Houthi attacks on shipping in the Red Sea have disrupted global trade and prompted a costly campaign by the U.S. military to intercept missiles and drones.

Oil prices edged higher last week, ending three straight weeks of declines fueled by concerns about a global economic slowdown driven by escalating trade tensions between the U.S. and other countries.

Both benchmarks pared some gains after rising more than 1% in early Asian trade as China reported a mixed start to the year. Industrial production slowed in January-February, while retail sales growth picked up slightly, government data showed on Monday.

The state council, or cabinet, unveiled what it called a "special action plan" on Sunday in a bid to boost domestic consumption and economic recovery amid a surge in U.S. trade tariffs on China, among its top trading partners.

The move threatens to disrupt the global trade order.

"The oil market is thus in a balance between the negative effects of Trump's tariffs versus the positive effects of China's stimulus measures," said Bjarne Schieldrop, chief commodity analyst at SEB Research.

"It seems likely that positive political signals from China regarding stimulus there will lift Brent crude up and out of the depressed range it has been trading in for the past 8-9 trading days," Schieldrop said in a note on Monday.

Analysts at Goldman Sachs cut their oil price forecasts, saying they expect the U.S. economy to grow slower than expected, due to tariffs imposed on countries such as Canada, China and Mexico.

"We are reducing our December 2025 Brent forecast by $5 to $71/bbl (WTI to $67), our Brent range to $65-$80, and our 2026 median Brent forecast to $68 (WTI to $64)," the analysts said in a note.

Oil demand is expected to grow at a slower pace than previously expected, while supply from the Organization of the Petroleum Exporting Countries and its allies (OPEC+) is expected to beat estimates, the Goldman analysts said.

Source: Investing.com