Oil prices slow selloff as Fed interest rate cut expectations grow By Reuters

By Katya Golubkova

TOKYO (Reuters) – A sharp sell-off was halted on Thursday as expectations of an interest rate cut by the Federal Reserve offset a slew of weak economic data from the world’s two largest economies, the United States and China.

futures were up 3 cents to $76.08 a barrel. U.S. West Texas Intermediate crude futures were down 5 cents to trade at $71.88 at 0036 GMT. Both contracts lost more than $1, or more than 1%, in the previous session.

WTI hit its lowest level since early February on Wednesday after revised U.S. employment statistics showed fewer jobs than previously reported and weak economic data from China, the world’s second-largest economy. world.

Revised jobs data offset support from falling US oil inventories.

The overnight slide in oil prices took a break in early Thursday trade, however, as markets focused on the prospect of a near-term US interest rate cut.

The Federal Reserve appeared to be on track to cut interest rates in September after the “vast majority” of officials said such action was likely, according to minutes from the US central bank’s July 30-31 meeting.

“Minutes from the July 31 Fed meeting show that tapering is just around the corner,” ANZ Research said in a note. “The prospect of monetary easing should support sentiment in energy and metals markets.”

Lower interest rates lower the cost of borrowing, which can boost economic activity and demand for oil.

Geopolitical risks also remained in the focus of investors’ attention.

In the Middle East, US President Joe Biden, in a phone call with Israeli Prime Minister Benjamin Netanyahu, stressed the urgent need to conclude a ceasefire for the hostages in Gaza and highlighted the upcoming talks in Cairo as crucial.

However, US Secretary of State Antony Blinken’s trip to the Middle East earlier this week ended without an agreement between Israel and Hamas militants on a ceasefire in the Palestinian enclave.