AA / Istanbul / Firdevs Yuksel
Oil prices rose in morning trading on Thursday, amid optimistic expectations of an interest rate cut by the US Federal Reserve (Fed) in the fourth quarter of this year.
International benchmark Brent crude traded at $78.92 per barrel at 10:07 a.m. local time (07:07 GMT), up 0.65% from Wednesday’s closing price which concluded trading at $78.41 per barrel.
The benchmark American barrel West Texas Intermediate (WTI), for its part, traded at 74.67 dollars per barrel, with an increase of 0.81% compared to yesterday’s price which ended the day at 74 .07 dollars per barrel.
Financial market indicators suggest the possibility of a reduction in the fourth quarter of this year in the US Federal Reserve’s key interest rate, which reached its highest threshold in 23 years, to combat inflation.
The possibility of a rate cut revives hopes of better economic activity and increased demand for oil across the Atlantic, which favors the upward trend in barrel prices.
The probability of a first rate cut by the Fed for the month of September is estimated at 60%, increasing to 87% for the month of November. However, forecasts fall to 57% for an unchanged key rate next December, following a possible cut in November.
Market participants believe that US employment data, due to be released on Friday, could influence these forecasts, in light of signals from non-farm employment figures.
The European Central Bank (ECB) is also expected to lower its benchmark interest rates this Thursday, for the first time in five years (since 2019) when announcing its decision. Inflation in the Eurozone is causing serious concern amid weak economic growth prospects.
Furthermore, figures from the Energy Information Administration (EIA), published on Wednesday evening, show a lower than expected demand for crude in the largest oil consuming country in the world, thus limiting the rise in prices .
U.S. reserves increased by about 1.2 million barrels during the week of May 31, while the market was expecting a decline of about 2.1 million barrels. Gasoline reserves also increased by about 2.1 million barrels.
* Translated from English by Mounir Bennour.
Only part of the dispatches, which the Anadolu Agency broadcasts to its subscribers via the Internal Broadcasting System (HAS), is broadcast on the AA website, in summary form. Please contact us to subscribe.
