Oil prices rose slightly in early trading on Monday on expectations of a US interest rate cut this week. However, growth was limited by weak economic data from China and lingering demand concerns.
International benchmark Brent crude rose 0.74 percent to $72.14 a barrel at 11.35 a.m. local time (0835 GMT), up from the previous session’s close of $71.61.
US benchmark West Texas Intermediate (WTI) rose 0.93% to $68.38 a barrel after closing at $67.75 in the previous session.
Markets are set for an interest rate cut by the US Federal Reserve following its meeting scheduled for Wednesday, which would be the first rate cut since 2020.
The bank is likely to start the easing cycle, but market uncertainty remains over how aggressive the rate cut will be.
While investors have raised their odds of an aggressive 50 basis point rate cut, a 25 basis point cut remains on the table. Lower interest rates typically reduce borrowing costs, which fuels expectations of increased economic activity and oil demand.
However, the rise in oil prices was tempered by rising demand in the market following the release of data from China. China’s economic data released over the weekend pointed to weakness in the economy of the world’s largest oil importer, adding to doubts about oil demand.
The country’s industrial production in August fell short of expectations, unemployment rose and house prices fell further.
