By Heesu Lee and Grant Smith
Oil is still on track for a modest monthly decline as concerns about demand weakness overshadow the threat that political tensions in the Persian Gulf will disrupt exports. Fed Chair Jerome Powell’s post-meeting press conference Wednesday will give clues to what’s in store for the rest of the year, possibly determining the fate of many developing economies for the coming months.
“The current situation and the outlook for the oil market aren’t so bad, with tightness likely to persist for the rest of the third quarter,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “The fears of a demand slump were overdone, and the market is now taking a more realistic approach.”
West Texas Intermediate for September delivery rose 46 cents to $57.33 a barrel on the New York Mercantile Exchange as of 10:05 a.m. London time. The contract gained 67 cents to close at $56.87 on Monday, climbing 1.8% over the past three sessions.
Brent for September settlement added 57 cents, or 0.9%, to $64.28 a barrel on the ICE Futures Europe Exchange. Prices gained for a third straight day on Monday. The global benchmark crude traded at a $6.94 premium to WTI.
See also: Flurry of Brent Oil Options Bets on Slow Rally Through 2021
Fed Chair Powell and his Federal Open Market Committee colleagues are expected to cut interest rates by a quarter percentage point to bolster growth in the economy.