Oil prices were mixed in a volatile trading session on Tuesday with slow economic growth data from China, the OPEC+ group’s decision to gradually reduce its voluntary additional cuts until the end of September 2025 and growing expectations of interest rate cuts from the US Federal Reserve (Fed).
International benchmark Brent crude fell 0.6% to $77.08 per barrel at 10.56 a.m. local time (0756 GMT), up from the previous session’s close of $77.52.
US benchmark West Texas Intermediate (WTI) rose 0.3% to $73.80 per barrel, after closing at $73.55 in the prior session.
Slow economic growth data from China, the world’s largest oil importer, pushed oil prices downward by fueling market players’ demand concerns.
China’s Manufacturing Purchasing Managers’ Index (PMI) decreased by 0.3 points to 49.1 in August, the economic activity in the manufacturing industry in China continued its contraction the previous 3 months in August.
Meanwhile, despite the downward movement in the oil market, the OPEC+ group, which consists of OPEC and some non-OPEC producing countries, does not give up its decision to gradually reduce its voluntary additional cuts until the end of September 2025.
The group announced that the 2.2 million barrels per day (bpd) cuts will be gradually phased out on a monthly basis until the end of September 2025, and the United Arab Emirates’ (UAE) decision to increase output by 300,000 bpd.
The 38th Ministerial Meeting of OPEC and non-OPEC countries is scheduled for 1 December 2024.
The decision alleviates the supply concerns of market players and aids the downward movement of prices.
On the other hand, ongoing uncertainties about the timing of the Fed interest rate cuts, continue to impact oil prices.
Analysts stated that the data in the US employment report to be released on Friday might provide more information about the course of the country’s economy, and might also embody the Fed’s roadmap for the next period.
While it is certain that the US Federal Reserve (Fed) will cut interest rates by 100 basis points by the end of the year, predictions that a 50 basis point rate cut will be made at the meetings in November or December remain strong.
