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Oil Prices Surge As US Interest Rate Cut Looms
(MENAFN- The Rio Times) Oil prices rebounded on Monday, erasing recent losses. Investors awaited the US Federal Reserve's interest rate decision with bated breath.
Brent crude, the global benchmark, rose 1.59% to $72.75 per barrel. West Texas Intermediate climbed 2.10% to $70.09 per barrel.
Hurricane Francine halted offshore operations in the Gulf of Mexico. Refineries along the coast remained shut since September 11.
This disruption supported oil prices. New economic data from the US strengthened expectations of a significant interest rate cut.
In Addition, the Empire State Manufacturing Index surprised analysts by jumping from -4.7 to 11.5 in September.
This unexpected rise bolstered predictions of a 50 basis point rate cut. Traders now see a 61% chance of rates falling to 4.75%-5.00%, up from 50% on Friday.
Lower interest rates typically stimulate economic growth, boosting oil demand. However, concerns about weakening Chinese demand persisted.
Ongoing ceasefire negotiations in Gaza also influenced market sentiment. These factors created a complex backdrop for oil price movements.
The oil market's recovery comes after a sharp decline last week. Investors balanced hopes for US economic stimulus against global demand worries.
The interplay between geopolitical events, economic data, and monetary policy continued to shape oil prices. As the week progresses, all eyes remain on the Federal Reserve.
Its decision could significantly impact oil prices and broader financial markets. The energy sector braces for potential volatility in the coming days.
Brent crude, the global benchmark, rose 1.59% to $72.75 per barrel. West Texas Intermediate climbed 2.10% to $70.09 per barrel.
Hurricane Francine halted offshore operations in the Gulf of Mexico. Refineries along the coast remained shut since September 11.
This disruption supported oil prices. New economic data from the US strengthened expectations of a significant interest rate cut.
In Addition, the Empire State Manufacturing Index surprised analysts by jumping from -4.7 to 11.5 in September.
This unexpected rise bolstered predictions of a 50 basis point rate cut. Traders now see a 61% chance of rates falling to 4.75%-5.00%, up from 50% on Friday.
Lower interest rates typically stimulate economic growth, boosting oil demand. However, concerns about weakening Chinese demand persisted.
Ongoing ceasefire negotiations in Gaza also influenced market sentiment. These factors created a complex backdrop for oil price movements.
The oil market's recovery comes after a sharp decline last week. Investors balanced hopes for US economic stimulus against global demand worries.
The interplay between geopolitical events, economic data, and monetary policy continued to shape oil prices. As the week progresses, all eyes remain on the Federal Reserve.
Its decision could significantly impact oil prices and broader financial markets. The energy sector braces for potential volatility in the coming days.
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