Oil prices rise without Gaza ceasefire by Investing.com

Investing.com– Oil prices rose in Asian trade on Monday, extending a rally from the previous session, as media reports showed no progress towards an Israel-Hamas ceasefire while hostilities in the region persisted.

Oil markets were also buoyed by optimism about a cut in US interest rates after comments by Federal Reserve Chairman Jerome Powell cemented expectations for a September cut. Oil rebounded on Friday following Powell’s comments.

U.S. crude that expires in October rose 0.8 percent to $79.59 a barrel, while it was up 0.6 percent to $75.45 a barrel by 9:01 p.m. ET (01:01 GMT).

Gaza ceasefire remains elusive in Cairo talks

Media reports indicated that talks between Hamas and Israel in Cairo did not lead to any agreement on a ceasefire over the weekend, diminishing any chance of a de-escalation in the 10-month-old war.

US officials said the talks were constructive, although the apparent lack of agreement undermined upbeat comments from US officials. However, talks will continue in the coming days.

Strikes between Hezbollah and Israel over the weekend further complicated the prospect of a ceasefire, although both sides said they did not want an escalation.

Persistent instability in the Middle East has traders placing some risk premium on oil, amid bets that an escalation of the Israel-Hamas conflict could destabilize oil production in the crude-rich region.

Duck cut joy, weak dollar buoy oil

Rising optimism about lower U.S. interest rates also supported oil prices as traders bet the world’s largest economy was headed for a soft landing.

It slipped to a 13-month low, further benefiting crude oil markets. A softer dollar makes oil cheaper for international buyers.

The Federal Reserve is expected to cut interest rates in September, although traders are divided on a cut of 25 or 50 basis points.

Recent U.S. inventory data showed domestic fuel demand remained strong, further fueling bets that oil demand will remain strong.

But lingering concerns about an economic slowdown in top oil importer China limited crude’s overall gains.