Oil prices increased modestly in early Monday trading, buoyed by expectations of a potential U.S. interest rate cut this week.
However, weaker economic data from China and persistent concerns about global demand tempered gains.
Brent crude futures for November were up 3 cents at $71.64 a barrel by 0402 GMT. According to Reuters, U.S. oil futures for October gained 16 cents, or 0.2%, to $68.81 a barrel.
Both contracts had settled lower in the previous session as supply disruption fears eased with Gulf of Mexico crude production resumption following Hurricane Francine. Additionally, recent data indicated a rise in the U.S. rig count, further alleviating supply concerns.
Despite these developments, nearly 20% of crude oil production and 28% of natural gas output in the Gulf of Mexico remain offline due to the hurricane’s impact.
This week, market attention will focus on the Federal Open Market Committee’s (FOMC) decision following its meeting on September 17-18.
According to CME FedWatch, Fed fund futures suggest a growing expectation among investors for a 50 basis point cut in U.S. interest rates rather than the previously anticipated 25 basis points.
A lower interest rate could reduce borrowing costs, boosting economic activity and increasing oil demand.
In China, the world’s largest oil importer, economic indicators were less supportive. In August, industrial output growth slowed to a five-month low, and retail sales and new home prices weakened.
Oil refinery output declined for a fifth consecutive month, reflecting subdued fuel demand and reduced export margins.
In other news, the U.S. dollar held steady after Republican presidential candidate Donald Trump was reported safe following what the FBI described as a second assassination attempt outside his golf course in Florida.
