Oil prices see modest increase
Date
10/1/2024 8:09:16 AM
(MENAFN) Oil prices saw a modest increase on Monday, driven by ongoing conflicts in the Middle East and expectations of heightened demand as economic activity ramps up in the world’s largest oil-consuming nations, the United States and China. However, the prospect of increased oil production from Saudi Arabia in December tempered further price surges.
At 10:40 a.m. local time (0740 GMT), the international benchmark brent crude was priced at USD71.95 per barrel, marking a slight rise of 0.02% from the previous session's close of USD71.93. Conversely, the US benchmark West Texas Intermediate (WTI) experienced a minor decline, falling by 0.16% to USD68.32 per barrel after a prior closing of USD68.43.
Analysts are closely monitoring upcoming employment data, which is expected to shed light on the U.S. Federal Reserve's future policy decisions and provide deeper insight into the overall health of the U.S. economy. Recent indicators revealing lower-than-expected inflation have sparked speculation that the Fed may shift its focus towards bolstering the labor market, potentially leading to further interest rate cuts.
Market sentiment reflects a strong anticipation that the Federal Reserve could implement a 75 basis point cut by year-end, with a 54 percent likelihood of a 50 basis point reduction occurring as early as November. These prospective interest rate cuts are seen as catalysts that could stimulate economic activity and consequently elevate oil demand.
In addition, China's recent initiatives to enhance economic mobility are believed to positively impact its oil demand, contributing to the rise in oil prices. Economic measures announced by the Chinese government, including plans to reduce mortgage interest rates to alleviate issues in the housing market, have begun to resonate in the markets, bolstering optimism about future demand.
Overall, the interplay between geopolitical tensions and anticipated economic recovery is shaping the outlook for oil prices, creating a complex environment for investors and analysts alike.
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