price movement
By 0934 GMT, crude futures were up 0.1%. Brent November delivery rose 23 cents, or 0.32 percent, to $71.84 a barrel. U.S. crude futures for October delivery rose 32 cents, or 0.47 percent, to $68 a barrel.
The market will likely remain cautious until the Fed’s decision is made, said Priyanka Sachdeva, market analyst at Philip Nova. Federal (U.S. Federal Reserve) on interest rates on Wednesday, adding that prices are still supported by supply concerns as some production capacity in the Gulf of Mexico remains offline.
Traders increasingly expect a price cut. Interest By 50 basis points instead of 25 basis points, according to the CME Group’s FedWatch service, which tracks Federal Reserve funds futures.
Lowering interest rates would lower the cost of borrowing, which in turn would boost economic activity and increase demand for
Kelvin Wong, senior market analyst at OANDA, said a 50 basis point rate cut could signal weakness in the US economy, which would add to oil demand concerns.
Nearly 20 percent of crude oil production and 28 percent of natural gas production in the Gulf of Mexico remain shut in the wake of Hurricane Frances.
Weaker Chinese economic data over the weekend dampened market sentiment, with expectations of a prolonged slowdown in the world’s second-largest economy adding to doubts about oil demand, IG market strategist Yip Junrong said in an email.
Industrial output growth in China, the world’s largest oil importer, slowed to a five-month low in August, while retail sales and new home prices weakened further.
Refinery throughput also fell for the fifth straight month, as disappointing fuel demand and weak export margins curbed production.
Brent and WTI crude prices rose about 1 percent each last week, but are still well below their August averages of $78.88 and $75.43 a barrel, respectively, after prices fell earlier this month due in part to demand concerns.
