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Crude oil prices were steady at the start of trading on Thursday as traders assessed signs of weak US demand against yesterday’s half-percentage-point cut in the US main interest rate, which was more than most expected, which was a quarter-percentage-point, in addition to escalating geopolitical tensions in the Middle East.
Bloomberg News Agency reported that Brent crude, the global oil benchmark, was trading at about $74 a barrel, and the price of West Texas Intermediate crude, the US oil benchmark, approached $71 a barrel, at a time when US demand for gasoline fell to less than 9 million barrels per day, and jet fuel consumption fell for the third week in a row, according to data from the US Energy Information Administration issued yesterday.
Brent crude fell about 15% in the third quarter of this year, due to concerns about a slowdown in the Chinese economy and increased global supplies. While the US Federal Reserve cut interest rates by 50 basis points, Chairman Jerome Powell said that no one should see this move as a “new path” to rapid rate cuts.
For his part, Vandana Hari, founder of Vanda Insights in Singapore, said, “The rise in oil prices at the beginning of this week was a result of expectations of a US interest rate cut.”
In the Middle East, Israeli Defense Minister Yoav Galant said that the Israeli war in Lebanon had entered a “new phase” and that Israeli forces would shift their focus from the Gaza Strip to the border with Lebanon, raising fears of a possible all-out war between Israel and the Lebanese Hezbollah and the possibility of it expanding and turning into a larger regional war with Iran, which would affect oil supplies from the Middle East, which produces about a third of the world’s oil production.
By 12:11 p.m. Singapore time, Brent crude was little changed at $73.67 a barrel for November delivery, while West Texas Intermediate crude was at $70.81 a barrel for October delivery.
