Oil Prices Stabilize Amid Rate Cut Bets

22 Aug 2024 , 09:45 AM

A dramatic sell-off in crude oil stalled on Thursday as anticipation of a Federal Reserve rate decrease outweighed a slew of dismal economic data from the world’s two largest economies, the United States and China.

Brent crude prices were up 3 cents to $76.08 per barrel. US West Texas Intermediate crude futures declined 5 cents to $71.88. Both contracts lost more than one dollar, or more than one percent, in the previous session.

WTI fell to its lowest level since early February on Wednesday, following updated U.S. employment statistics that showed fewer jobs than initially reported and negative economic data from China, the world’s second-largest economy.

The updated job statistics counterbalanced assistance from a decline in US oil inventories.

However, the overnight drop in oil prices was tempered in early Thursday trade as markets focused on the potential of near-term rate cuts in the United States.

According to the minutes of the Federal Reserve’s July 30-31 meeting, a “vast majority” of policymakers predicted an interest rate drop in September.

In the Middle East, US President Joe Biden emphasised the importance of concluding a Gaza ceasefire-for-hostages agreement during a phone chat with Israeli Prime Minister Benjamin Netanyahu, citing the upcoming Cairo talks as critical.

However, U.S. Secretary of State Antony Blinken’s trip to the Middle East earlier this week concluded without Israel and Hamas terrorists reaching an agreement on a truce in the Palestinian enclave.

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