OIL advanced, solidifying gains from the previous week, as a move above key technical levels helped extend a rally sparked by signs that the Federal Reserve will resume cutting interest rates, reports Bloomberg.
West Texas Intermediate (WTI) climbed as much as 1.7 per cent to the highest in almost three weeks, while Brent surpassed $68 a barrel. Fed Chair Jerome Powell on Friday signalled in a speech that the central bank could cut interest rates as soon as its September policy meeting. The comments boosted crude futures on expectations that a rate cut would boost the US economy and raise oil demand.
WTI’s jump above its 100-day moving average of about $64.45 also spurred some buying from algorithmic-based traders.
Elsewhere, Ukraine struck Russia’s Baltic port of Ust-Luga overnight, the latest in a series of attacks on energy infrastructure. Ukraine has attacked eight Russian refineries so far this month, raising concerns of exacerbated fuel market tightness.
Longer-term sentiment remains subdued. Money managers cut their bullish position on crude to the lowest in about 17 years as two of the world’s main oil forecasting agencies said inventories are poised for a glut next year. Crude has been trading in a narrow range since early August as traders reconcile a bearish long-term outlook with several potentially bullish near-term geopolitical factors.
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