OIL PRICE: BRENT NEAR $76, WTI NEAR $72

REUTERS - Aug 22, 2024  - A sharp sell-off in crude oil paused on Thursday after expectations of a rate cut by the Federal Reserve offset a bunch of weak economic data from the world's two largest economies, the United States and China.

Brent crude futures were 3 cents up to $76.08 a barrel. U.S. West Texas Intermediate crude futures fell 5 cents to trade at $71.88 at 0036 GMT. Both contracts lost over $1, or more than 1%, in the previous session.

WTI touched its lowest since early February on Wednesday after revised U.S. employment statistics showed fewer jobs than previously reported and weak economic data from China, the world's second-largest economy.

The revised jobs data offset support from a drop in U.S. oil inventories.

The overnight downturn in oil prices took a breather in early Thursday trade, however, as markets focussed on the prospects for near term U.S. rate cuts.

The Federal Reserve appeared to be on track for an interest rate cut in September after a "vast majority" of officials said such an action was likely, according to the minutes of the U.S. central bank's July 30-31 meeting.

"The minutes from the Fed's 31 July meeting show that cuts are just around the corner," ANZ Research said in a note. "The prospect of easing monetary policy should support sentiment across the energy and metal markets."

Lower interest rates reduces the cost of borrowing, which can boost economic activity and demand for oil.

Geopolitical risks also remained at the centre of investors' focus.

In the Middle East, U.S. President Joe Biden, in a phone call with Israeli Prime Minister Benjamin Netanyahu, stressed the urgent need to conclude a Gaza ceasefire-for-hostages deal and pointed to upcoming Cairo talks as crucial.

However, U.S. Secretary of State Antony Blinken's trip to the Middle East earlier in the week ended without an agreement between Israel and Hamas militants on a truce in the Palestinian enclave.

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