Oil climbed on geopolitical risks, FED rate-cut expectations
Oil prices rose on Monday, supported by renewed geopolitical tensions and expectations of a US interest rate cut, though gains were capped by rising OPEC+ supply.
Oil prices rose on Monday, supported by renewed geopolitical tensions and expectations of a US interest rate cut, though gains were capped by rising OPEC+ supply.
Brent crude settled $1.07 higher, or 1.6%, at $68.80 a barrel.
West Texas Intermediate gained $1.14, or 1.8%, to $64.80.
Traders cited heightened risks to Russian exports after Ukraine intensified strikes on energy facilities. At the same time, investors weighed the potential for new US sanctions on Russia as peace talks between Washington, Kyiv, and Moscow show little progress. However, the impact of potential supply disruptions was tempered by OPEC+’s move to unwind earlier production cuts, adding significant volumes back to the market.
On the macroeconomic front, sentiment improved after the Federal Reserve (FED) signalled on Friday that policymakers may cut rates in September, with soft US jobs data reinforcing those expectations. Still, uncertainty lingers over the inflationary impact of new tariffs introduced by the US government, though the FED suggested the effects could be temporary.
Written by: Farid Muzaffar