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Oil surges amid US rate cut and geopolitical tensions – London Business News | Londonlovesbusiness.com

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Oil surges amid US rate cut and geopolitical tensions – London Business News | Londonlovesbusiness.com

Oil futures extended their gains on Thursday in response to the U.S. Federal Reserve’s substantial interest rate cut.

The reduction could support economic activity and stimulate energy demand in the US, contributing to higher oil prices.

However, the large move also sparked concerns about a potential economic slowdown, which could constrain further increases in oil prices. In this regard, traders could monitor the next steps in monetary policy and new US economic data.

In addition, persistent apprehensions regarding global demand continue to impact the market. China’s economic slowdown remains a negative influence. At the same time, a larger-than-expected drawdown in US crude inventory could support demand expectations. Although sentiment remains pessimistic, positive signs regarding demand could help stabilize prices.

Moreover, ongoing geopolitical tensions in the Middle East may support crude oil prices in particular as risks of a flare-up in tensions remain important.

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