Oil prices rise as investors look for signs US rate cuts to begin
2024.07.21 21:01
By Katya Golubkova
TOKYO (Reuters) – Oil prices rose in early trade on Monday as investors keep a lookout for signs of a rate-cut cycle expected to begin as soon as September.
prices were up 48 cents, or 0.57%, at $83.10 a barrel by 0035 GMT, and U.S. West Texas Intermediate crude futures rose 42 cents, or 0.52%, to $80.55.
“Since the June FOMC meeting, inflation and labour market data have signalled that disinflation and labour market rebalancing are in place, which we expect will allow the Fed to begin its interest rate cutting cycle in September,” ANZ Research said in a note.
The U.S. Federal Reserve will next hold a Federal Open Market Committee (FOMC) meeting on interest rates on July 30-31, at which investors expect the Fed to keep the rates unchanged, while looking for any signal of a cut coming later in the year.
On the political front, U.S. President Joe Biden abandoned his reelection bid on Sunday under pressure from fellow Democrats and endorsed Vice President Kamala Harris as the party’s candidate to face Republican Donald Trump in November.
Slower-than-expected economic growth of 4.7% for China in the second quarter sparked concerns last week over the country’s demand for oil and continues to weigh on prices.
On Sunday, China released a policy document outlining known ambitions, from developing advanced industries to improving the business environment, with analysts spotting no sign of imminent structural shifts in the world’s second-biggest economy.
The 60-point document’s publication follows last week’s closed-door meeting of the Communist Party’s Central Committee that takes place roughly every five years.
