Early on Monday, oil prices increased as traders watched for indications of a cycle of rate cuts that may start as early as September, according to Reuters.
By 2:35 a.m. Saudi time, Brent crude prices had increased by 48 cents, or 0.57 percent, to $83.10 a barrel, while US West Texas Intermediate crude futures had increased by 42 cents, or 0.52 percent, to $80.55.
“Labor market rebalancing and disinflation have been signaled by inflation and inflation data since the June FOMC meeting, which we expect will allow the Fed to start its cycle of interest rate cutting in September,” ANZ Research wrote in a note.
The US Federal Reserve will next meet on July 30-31 to discuss interest rates with the Federal Open Market Committee. Investors anticipate that the Fed will maintain current rates during this meeting, but they will be watching for any indications of a reduction later in the year.
Under pressure from other Democrats, US President Joe Biden withdrew his bid for reelection on Sunday and supported Vice President Kamala Harris as the party’s nominee to run against Republican Donald Trump in November.
China’s second-quarter GDP growth of 4.7%, which was lower than forecast, raised questions last week about the nation’s oil consumption and is still having an impact on prices.
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