Oil prices increased on Monday as rising tensions in the Middle East led traders to factor in a higher risk premium, while expectations of lower interest rates bolstered hopes for improved demand.
Crude prices are on a two-week upswing from near three-year lows, with supply disruptions following Hurricane Francine contributing to a tighter market.
Brent oil futures for November rose 0.5 percent to $74.83 per barrel, while West Texas Intermediate crude futures climbed 0.4 percent to $70.41 per barrel as of 21:30 ET (01:30 GMT).
Read more: Oil prices slip as traders lock in profits, weekly rise boosted by U.S. rate cut
Fed rate cut fuels oil prices, economic indicators awaited
Oil prices saw an uptick after the U.S. Federal Reserve made a significant interest rate cut last week and signaled the beginning of an easing cycle. This development raised expectations that lower rates could stimulate economic growth in the upcoming months, potentially boosting crude demand.
Further insights from the Fed are anticipated this week, with several officials, including Chair Jerome Powell, scheduled to speak. Additionally, the Fed’s key inflation measure—the PCE price index data—is set for release on Friday.
In addition to the Fed, both the Swiss National Bank and the Swedish central bank are poised to meet this week, with expectations of interest rate cuts from both institutions.
Ongoing Middle East tensions
Traders are incorporating a risk premium into oil prices, amid persistent tensions in the Middle East. Concerns persist that escalating conflict in this oil-rich region could disrupt supplies, further tightening global markets.
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