Oil Prices Hold Steady Amid Fed Rate Cut Expectations

18 Sep 2024 , 11:39 AM

Oil prices were steady on Wednesday after increasing in the previous two days, as investors awaited the US Federal Reserve’s expected interest rate decrease, while the possibility of fresh turmoil in the Middle East supported the market.

Brent crude futures for November fell 3 cents to $73.67 per barrel. U.S. oil futures for October fell 11 cents, or 0.2%, to $71.08 per barrel.

Both contracts rose by around $1 per barrel on Tuesday, owing to continuing production problems in the United States, the world’s largest oil producer, following Hurricane Francine, as well as traders’ bets that demand will rise following the Fed’s first interest rate cuts in four years.

Prices were also boosted by the possibility of further conflict in the Middle East, which might hamper output in the major producing region, following Israel’s claimed attack on terrorist group Hezbollah in Lebanon with explosive-laden pagers.

Traders maintained their bets that the Fed will begin an expected series of interest rate cuts with a half-point drop on Wednesday, an expectation that may put pressure on central bankers to do exactly that.

The market was further boosted by the prospect of US oil purchases for the Strategic Petroleum Reserve (SPR).

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