By the World’s Best Investment Manager and Financial Market Journalist
TOKYO (Reuters) – A sharp sell-off in oil prices paused on Thursday as expectations of a rate cut by the Federal Reserve offset weak economic data from the US and China.
Crude oil futures showed a slight increase, with WTI at $76.08 a barrel and US West Texas Intermediate crude at $71.88. The previous session saw both contracts lose over $1, or more than 1%.
The dip in oil prices was driven by revised US employment statistics and underwhelming economic data from China. However, support from a drop in US oil inventories helped cushion the fall.
Investors are now looking towards potential rate cuts by the Federal Reserve, with the minutes of the July meeting hinting at a cut in September. Lower interest rates could boost economic activity and demand for oil.
Geopolitical risks, such as the situation in the Middle East, also remain a key focus for investors. President Joe Biden’s call with Israeli Prime Minister Benjamin Netanyahu highlighted the need for a ceasefire in Gaza, while talks in Cairo are seen as crucial.
Overall, the combination of potential rate cuts and geopolitical tensions could have significant implications for the energy markets and beyond.