• Main
  • Analytics
  • Market News
  • Oil prices resumed their growth after Friday's collapse
Economic news
22.07.2024

Oil prices resumed their growth after Friday's collapse

Oil prices rose by about 0.5%, helped by expectations of the start of the Fed's monetary policy easing cycle at the September meeting. The negative dynamics of the US currency also supports prices.

Experts said that given the US data on inflation and the labor market, which indicated that disinflation and labor market rebalancing are in place, market participants have become more confident that the Fed will start lowering interest rates in September. According to the CME FedWatch Tool, markets see a 4.7% probability of a 25 basis point rate cut at the Fed meeting in July, a 96.2% probability of a rate cut in September, and a 98.8% probability of monetary policy easing in November. 

Meanwhile, the news that President Joe Biden had decided to abandon his re-election bid was ignored by the oil market, but put pressure on the US dollar. The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.13% to 104.26. A weaker dollar makes oil less expensive for buyers holding other currencies.

Some support for prices was provided by news from China, which is the largest importer of oil. The Central Bank of China said that in order to stimulate the world's second largest economy, it decided to reduce a key short-term policy rate and its benchmark lending rates.

See also