LONDON, Sept 16 (Askume) – Oil prices held steady on Monday as ongoing disruptions to U.S. Gulf oil infrastructure balanced out ongoing demand concerns following new data from China, while investors await news on U.S. interest rates this week.
November Brent crude futures were up 23 cents, or 0.32%, at $71.84 a barrel by 0934 GMT. U.S. crude futures for October rose 32 cents, or 0.47%, to $68 a barrel.
Phillip Nova analyst Priyanka Sachdeva said the market is likely to remain cautious ahead of the Federal Reserve’s decision on interest rates on Wednesday. She said some supply concerns are still supporting prices as some capacity in the Gulf of Mexico remains offline.
BusinessmanBet on a 50 basis point (bps) rate cut , not 25 bps becauseShown by CME’s FedWatch tool, which tracks the future of federal funds.
Lower interest rates generally reduce the cost of borrowing, which can boost economic activity and increase demand for oil.
However, OANDA analyst Calvin Wong said a 50 basis point interest rate cut could also be a sign of weakness in the US economy, raising concerns about oil demand.
Nearly one-fifth of crude oil production and 28% of natural gas production in the Gulf of Mexico halted following Hurricane Francine .
Weak economic data from China released over the weekend weighed on market sentiment, while a sluggish outlook for long-term growth in the world’s second-largest economy eased concerns about oil demand, IG Markets strategist Yeap Jun Rong said in an email.
Industrial production growth in China, the world’s biggest oil importer, fell to a five-month low in August, while retail sales and new home prices weakened further.
Refinery output also declined for the fifth consecutive month amid weak fuel demand and export profits.
Brent and WTI rose about 1% last week but remained below the August averages of $78.88 and $75.43 a barrel, after prices tumbled earlier this month on demand concerns.
