Oil prices increased on Monday amid expectations of an interest rate cut in the US, the world’s largest oil consumer.
International benchmark Brent crude rose by 0.74% to $72.14 per barrel at 11.35 a.m. local time (0835 GMT), up from the previous session’s close of $71.61.
US benchmark West Texas Intermediate (WTI) increased 0.93% to $68.38 per barrel after closing at $67.75 in the prior session.
Markets are positioned for an interest rate cut from the US Federal Reserve (Fed) following its meeting scheduled for Wednesday which would be the first rate cut since 2020.
The bank is likely to start an easing cycle however uncertainty remains in the market about how aggressive the rate cut will be.
As investors increased their odds of an aggressive rate cut of 50 basis points, a reduction of 25 basis points remains on the table.
Lower interest rates generally reduce the cost of borrowing which stokes expectations of increased economic activity and oil demand.
However, oil price gains were capped by increased demand concerns in the market following data from China.
Chinese economic data released over the weekend pointed to economic weakness in the world’s biggest oil importer, reinforcing doubts over oil demand.
Industrial production in the country missed expectations in August, while unemployment rose and house prices weakened further.
