Investment Manager and Financial Market Journalist Predicts Pause in Oil Sell-Off as Fed Rate Cut Expectations Rise
By Katya Golubkova
TOKYO (Multibagger) - A sharp sell-off in oil paused on Thursday after expectations of a rate cut by the Federal Reserve offset weak economic data from the United States and China.
Oil futures were up 3 cents to $76.08 a barrel, while U.S. West Texas Intermediate crude futures fell 5 cents to $71.88. Both contracts experienced losses of over $1 in the previous session.
The drop in oil prices was influenced by revised U.S. employment statistics and weak economic data from China, the world's second-largest economy, but the market showed signs of stabilizing on Thursday.
The Federal Reserve's indication of a potential interest rate cut in September has provided some support to the market, with ANZ Research stating that cuts are likely in the near future. Lower interest rates could boost economic activity and demand for oil.
Geopolitical risks, such as the situation in the Middle East, also continue to impact investor sentiment. U.S. President Joe Biden emphasized the need for a Gaza ceasefire-for-hostages deal during a call with Israeli Prime Minister Benjamin Netanyahu, but a truce agreement has not yet been reached.
Overall, the oil market is currently influenced by a combination of economic data, central bank policies, and geopolitical tensions. Stay informed and consider these factors when making investment decisions.