Oil rose over 1% on US rate cut and shrinking stockpiles
These price increases followed the US Federal Reserve's half-point rate cut, a move intended to stimulate economic growth and potentially increase energy consumption.
Global oil prices extended gains on Thursday, September 19, climbing over 1% due to a larger-than-expect US interest rate cut and shrinking commercial crude stockpiles. These factors helped offset concerns about weakening demand in China, where economic activity has slowed.
Brent futures settled at $74.88/barrel, up by $1.23.
WTI rose $1.04, closing at $71.95/barrel.
These price increases followed the US Federal Reserve's half-point rate cut, a move intended to stimulate economic growth and potentially increase energy consumption. However, skeptics warn this could be a sign of underlying labor market fragility, casting doubt on the long-term benefits for the oil market.
The drop in US commercial crude stockpiles to a one-year low added further upward pressure on prices. Industry experts anticipate US crude exports will rise following supply chain disruptions caused by Hurricane Francine, which would lead to a further drawdown in inventories.
Written by: Muhammad Hafiz
Edited by: Rochelle Nguyen