Oil prices edged up slightly on Monday, anticipating a potential U.S. interest rate cut. However, the gains were capped by concerns about slowing economic growth in China, the world’s top oil importer.
Limited Gains:
- Brent crude futures rose marginally by 3 cents to $71.64 per barrel.
- U.S. crude futures for October delivery gained 0.2% to $68.81 per barrel.
Mixed Signals:
- Previous session losses reflected easing supply concerns after Hurricane Francine.
- Gulf of Mexico production was resuming, and U.S. rig count data showed an increase.
- However, nearly 20% of oil and 28% of natural gas production in the Gulf remains offline due to the storm.
Fed Watch:
- The key market driver this week will be the Federal Open Market Committee (FOMC) meeting on September 17-18.
- Investors increasingly anticipate a 50 basis point rate cut by the Fed, which could stimulate the economy and boost oil demand.
China Concerns:
- China’s industrial output growth slowed to a five-month low in August.
- Retail sales and new home prices also weakened, while oil refinery output fell for a fifth consecutive month.
Dollar Steady:
- The U.S. dollar remained stable following news that Republican presidential candidate Donald Trump was unharmed after a suspected assassination attempt.
