Oil rises after US interest rate cuts and geopolitical concerns

Oil prices rose slightly in early trade on Monday, supported by fears that the conflict in the Middle East will affect supplies from the main producer sector and expectations that last week’s interest rate cut in the United States will support demand. .

Brent crude futures for November delivery rose 20 cents, or 0.3 percent, to $74.69 a barrel at 00.45 GMT. U.S. West Texas Intermediate futures for November delivery rose 22 cents, or 0.3 percent, to $71.22.

Both crude oil prices recorded an increase in the previous session, supported by a decrease in interest rates in the United States and a decrease in American supplies due to Hurricane Francine.

Last Wednesday, the Federal Reserve (US central bank) cut interest rates by half a percentage point, a bigger reduction in borrowing costs than many expected.

Interest rate cuts typically boost economic activity and energy demand, but analysts and market participants are concerned that the central bank will see a slowdown in the labor market.

ANZ Bank said: “Sentiment has risen as a result of the Federal Reserve cutting interest rates amid hopes of its ability to achieve a smooth recession. ” The decline in the dollar supported investor sentiment.

The bank said the fighting between Israel and Iran-backed groups in the Middle East has raised fears that Iran would be drawn into the conflict. Iran is a major oil producer in the region.

Israel and Hezbollah clashed yesterday, Sunday, when the Lebanese group fired missiles deep into northern Israel after being subjected to some of the heaviest bombing operations in almost a year of conflict.

The conflict escalated dramatically last week after thousands of pagers and walkie-talkies used by Hezbollah members exploded. The finger of blame was pointed at Israel, who did not confirm or deny their responsibility.