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Oil prices rise ahead of expected U.S. interest rate cut

Published 07/30/2019, 08:36 AM
Updated 07/30/2019, 08:40 AM
Oil prices rise ahead of expected U.S. interest rate cut
LCO
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TOKYO, July 30 (Reuters) - Oil prices extended overnight
gains on Tuesday amid widespread expectations the U.S. Federal
Reserve will cut interest rates for the first time in more than
a decade this week.
Brent crude LCOc1 rose 30 cents, or 0.5%, to $64.01 a
barrel by 0013 GMT, after gaining 0.4% the previous session.
U.S. crude barrel, having risen 1.2% on Monday.
Crude futures are "well bid on the back of rising
expectations of a rate cut in the U.S.," ANZ Research said in a
morning note, adding that optimism over Sino-U.S. trade talks
and Middle East tensions are also supporting prices.
U.S. central bankers will begin their two-day meeting later
in the day and are expected to lower borrowing costs for the
first time since the depths of the financial crisis more than a
decade ago. U.S. President Donald Trump said a small rate cut "is not
enough."
Economic growth in the United States slowed less than
expected in the second quarter, strengthening the outlook for
oil consumption but, elsewhere, disappointing economic data has
increased concerns about slower growth.
U.S. and Chinese negotiators meet this week for their first
in-person talks since a G20 truce last month, with some
optimistic that the discussions will help bridge the gap between
the world's two largest economies.
However, Trump said China might not want to sign a trade
deal until after the 2020 U.S. election.
Supply risks are still a concern as tensions remained high
around the Strait of Hormuz, through which about a fifth of the
world's oil passes.
Tensions spiked between Iran and the West after Iranian
commandos seized a British-flagged oil tanker in the Gulf this
month in apparent retaliation for the capture of an Iranian
tanker by British forces near Gibraltar.


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