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Oil prices rose in early trade on Monday amid expectations of a U.S. interest rate cut this week, but gains were capped by a resumption of U.S. supplies after Hurricane Frances and weaker Chinese data.
By 00:15 GMT, Brent crude futures for November delivery were up 15 cents, or 0.2%, at $71.76 a barrel. U.S. crude futures for October delivery were up 23 cents, or 0.3%, at $68.88 a barrel.
Both crudes settled lower in the previous session, as concerns about supply disruptions eased after crude oil production resumed in the Gulf of Mexico following Hurricane Frances, and as data showed a weekly increase in the number of drilling rigs in the United States.
However, about 20% of crude oil production and 28% of natural gas production in the Gulf of Mexico remain offline after the hurricane.
A key factor that will affect the market this week is how much the Federal Reserve will cut interest rates after its meeting on Sept. 17-18. Fed fund futures show investors increasingly betting that the central bank will cut rates by 50 basis points instead of 25 basis points, according to CME’s FedWatch market monitoring tool.
Lowering interest rates would reduce the cost of borrowing, boosting economic activity and increasing demand for oil.
In China, the world’s biggest oil importer, industrial output growth slowed to a five-month low in August, while retail sales and new home prices fell further. Refinery throughput fell for a fifth straight month as disappointing fuel demand and weak export margins curbed production.
The dollar remained stable after Republican presidential candidate Donald Trump survived what the FBI said was a second assassination attempt outside his Florida golf course.
In the Middle East, Israeli Prime Minister Benjamin Netanyahu said Israel would exact a “heavy price” from the Iran-aligned Houthis after they fired a missile that reached central Israel for the first time on Sunday.
