Oil Prices Surge on Looming Fed Interest Rate Cut Forecast

On Monday, oil prices increased due to the looming Federal Reserve (Fed) interest rate cut outlook this week.

In the Asian morning session, Brent futures ending in November rose by 20.00% to $71.76 a barrel. Furthermore, West Texas Intermediate for November contracts surged by 32.00% to $67.97 per barrel.

According to reports, both contracts saw significant declines in the last session. Concerns over supply disruptions slid as oil production in the Gulf of Mexico resumed after Hurricane Francine, and data revealed a weekly surge in the US rig count.

However, nearly 20.00% of crude output and 28.00% of natural gas yield in the Gulf of Mexico remain offline after the hurricane.

Moreover, this week, the market’s crucial focus is on how aggressive the Fed will be in cutting rates following the two-day meeting.

Reports revealed that the regulator’s fund futures indicate investors are increasingly betting on a 50-basis-point reduction compared to the 25-basis-point forecast.

Lower interest rates will decrease borrowing costs, potentially stimulating economic activity and increasing demand for oil.

Furthermore, data showed China’s industrial yield growth waned to a five-month low in August, while retail sales and new home prices slowed further.

These readings heightened concerns that slowing economic growth in Beijing could reduce its demand for crude.

Iraq Dismisses Oil Dip Impact on Public Sector Salaries

Mudher Mohammed Saleh, Iraq’s prime minister advisor, denied worries that dropping oil prices may likely affect the monthly salaries of local public sector workers.

Saleh stated that claims of a financial liquidity crisis and delayed salaries for public sector employees are merely rumors, political distortions, and misleading.

According to reports, he added that Iraq has previously dealt with declining oil prices, which have not impacted the wages of state employees.

Furthermore, Saleh reassured the country’s approximately 4.5 million public employees that their salaries were fully secured and would be paid on time.

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