Oil prices remained primarily stable on Tuesday as investors kept their eye on the geopolitical tensions in the Middle East. There is also optimism that the US Federal Reserve will soon reduce interest rates, which will help boost global economic growth and demand for fuel.
According to Leon Lee, an analyst at CMC Market, the recent rise in crude oil prices was due to the expectation of lower interest rates and the conflict in the Red Sea. However, concerns about the supply of crude oil were eased to some extent by Maersk’s announcement that shipping routes through the waterway would resume.
The market is experiencing low trading volume as some markets are closed for Christmas.
Oil prices have been given a boost due to the expectation that the US Central Bank will decrease interest rates in the coming year. This comes after the release of US data last Friday, which showed that inflation is now at or below the central bank’s target of two percent, as indicated by some key indicators.
Lowering interest rates can stimulate economic growth and increase oil demand by reducing borrowing costs for consumers.
Brent crude futures increased by 7 cents to $78.75 per barrel at 10:50 GMT, whereas the price of US West Texas Intermediate crude decreased by 15 cents to $73.41 per barrel.
