The price of oil rose by about 0.7%, continuing yesterday's rally and reaching its highest level since September 6. The price increase was caused by concerns about oil production in the United States, as well as expectations of a decrease in oil reserves in the United States. Investors are also preparing for the Fed meeting.
More than 12% of crude production and 16% of natural gas output in the U.S. Gulf of Mexico were offline, according to the U.S. Bureau of Safety and Environmental Enforcement (BSEE).
As for the Fed meeting, its results will be announced on Wednesday, at 18:00 GMT. According to the CME FedWatch Tool, markets see a 67% probability of a 0.5% rate cut in September (up from 34% the week before), and a 33% probability of a 0.25% rate cut (down from 66% the week before). A lower interest rate will reduce the cost of borrowing and can potentially lift oil demand by supporting economic growth.
Overall, growing expectations of aggressive Fed rate cuts, along with ongoing supply disruptions, boosted sentiment across the commodities complex
Market participants are also preparing for the release of weekly US data on oil inventories: the American Petroleum Institute will present its report later today, and official data from the Energy Information Administration will be released tomorrow. Consensus estimates suggest that crude oil inventories decreased by 200,000 barrels last week.