Oil Prices Climb on Optimism Over Potential Fed Interest Rate Cut and Middle East Disruptions
WASHINGTON — Oil prices soared on Monday, fueled by positive sentiment surrounding a potential interest rate cut by the US Federal Reserve (Fed) and ongoing disruptions in cease-fire negotiations in the Middle East.
Brent Crude and WTI See Gains
International benchmark Brent crude surged by 0.73% to $78.72 per barrel at 09:33 a.m. local time (0633 GMT), up from the previous session’s close of $78.15. Meanwhile, US benchmark West Texas Intermediate (WTI) also rose by 0.82% to $75.44 per barrel, following a close of $74.83 in the prior session.
Fed Chair Signals Possible Interest Rate Cut
During a speech at the annual Jackson Hole symposium in Wyoming, US Federal Reserve Chair Jerome Powell hinted at a potential interest rate cut at the central bank’s upcoming meeting in September. This news caused commodity prices to surge as investors reacted to the possibility of economic stimulation and increased oil demand.
Market Predictions and Middle East Tensions
Analysts are confident that the Fed will implement a 25 basis point interest rate cut next month, with a 50 basis point cut also being considered. Market pricing suggests that a total of 100 basis points in cuts could occur by the end of the year.
Additionally, concerns over supply disruptions in the Middle East have contributed to the rise in oil prices. Despite ongoing cease-fire negotiations, Israel has escalated attacks on the blockaded Gaza Strip, resulting in a significant number of casualties and injuries.
The latest round of talks in Cairo ended without a resolution, as Hamas insists on Israel adhering to previously agreed terms. The situation remains tense as the region grapples with escalating tensions and uncertainties. — Agencies
