Global oil prices rise 2pc

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NEW YORK: Oil prices rose two per cent on Thursday after the Federal Reserve’s large cut in US interest rates, helping global benchmark Brent crude recover from its lowest in nearly three years hit last week.

Brent futures rose to $75.09 a barrel by 12:19pm ET (1619 GMT), up by $1.44, or 2pc, and rebounding from last week’s levels below $69 a barrel. US crude gained $1.53, or 2.1pc, to $72.44 a barrel.

The US central bank cut interest rates by half a percentage point on Wednesday. Interest rate cuts typically boost economic activity and energy demand, but the market also saw it as a sign of a weaker US labor market that could slow the economy.

“While the 50 basis point cut hints at harsh economic headwinds ahead, bearish investors were left unsatisfied after the Fed raised the medium-term outlook for rates,” ANZ analysts said in a note.

Rising tensions in the Middle East were also boosting crude prices, said Tim Snyder, chief economist at Matador Economics.

Weak demand from China’s slowing economy was limiting oil’s gains, said Alex Hodes, oil analyst at brokerage StoneX.

Published in Dawn, September 20th, 2024

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