Oil Prices Surge Amid Middle East Tensions And US Interest Rate Cut Expectations
Date
9/17/2024 7:00:08 PM
(MENAFN- The Rio Times) Oil prices climbed over 1% on Tuesday, driven by escalating Middle East tensions and anticipation of US interest rate cuts.
Investors closely monitored the federal Reserve's upcoming decision and the production halt in the Gulf of Mexico. The brent crude benchmark for November delivery rose 1.31% to $73.70 per barrel on the Intercontinental Exchange in London.
West Texas Intermediate (WTI) crude futures for November increased 1.36% to $69.96 per barrel on the New York Mercantile Exchange.
The oil market maintained barrel prices above $70, reflecting growing concerns about regional stability in the Middle East.
Tensions escalated after Lebanon's Hezbollah group vowed retaliation against Israel for a pager detonation that killed eight people.
The incident injured 2,750 individuals, including Hezbollah fighters and the Iranian ambassador to Beirut. Lebanese Communications Minister Ziad Makary condemned the attack as "Israeli aggression."
In the United States, offshore platforms in the Gulf of Mexico remained shut down due to Hurricane Francine. The operations have been suspended since September 11, impacting oil production in the region.
Investors also focused on US monetary policy, with many anticipating a 50 basis point interest rate cut. According to the CME Group 's FedWatch tool, traders now see a 63% chance of rates dropping to 4.75%-5.00%.
Lower interest rates typically stimulate economic growth, potentially boosting oil demand. This expectation has contributed to the positive sentiment in the oil market.
In short, as geopolitical tensions persist and economic factors evolve, oil prices continue to reflect these complex global dynamics.
MENAFN17092024007421016031ID1108685166
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.