LONDON: Oil prices rose for a fourth day on Tuesday on optimism the US Federal Reserve will this week cut interest rates for the first time in more than 10 years, supporting fuel consumption in the world’s biggest oil user.
Brent crude LCOc1 rose 56 cents to $64.27 a barrel by 0906 GMT. It is set for a monthly fall of more than 3 per cent, however, due to lingering worries about oil demand.
US crude CLc1 was up 44 cents at $57.31 a barrel, but also set for a monthly decrease of around 1.8 per cent.
“Price support was provided by the resumption of the US-China trade talks and by the general belief that the Federal Reserve will cut interest rates,” PVM analysts said in a note.
While the Bank of Japan held off on expanding stimulus on Tuesday, it signalled its readiness to do so “without hesitation” if a global slowdown jeopardizes the country’s economic recovery.
US central bankers will begin their two-day meeting later on Tuesday and are expected to lower borrowing costs for the first time since the depths of the financial crisis more than a decade ago.
US President Donald Trump said a small rate cut “is not enough”.
Economic growth in the United States slowed less than expected in the second quarter, strengthening the outlook for oil consumption but, elsewhere, disappointing economic data has increased concerns about slower growth. Supply risks are still a concern as tensions remained high around the Strait of Hormuz, through which about a fifth of the world’s oil passes. — Reuters
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