WTI appreciates to near $68.00 due to a potential hurricane approaching US Gulf Coast
WTI price gains ground due to the potential approach of a hurricane toward the US Gulf Coast.
An adverse weather is expected to become a hurricane before reaching the northwestern US Gulf Coast.
The rising odds of a Fed rate cut in September provide support for the Oil prices.
West Texas Intermediate (WTI) Oil price recovers its recent losses registered in the previous session, trading around $68.00 per barrel during Monday’s Asian hours. The uptick in crude Oil prices is attributed to the potential approach of a hurricane toward the US Gulf Coast.
The US National Hurricane Center (NHC) reported on Sunday that adverse weather in the southwestern Gulf of Mexico is expected to strengthen into a hurricane before reaching the northwestern US Gulf Coast. This region accounts for approximately 60% of US refining capacity, according to Reuters.
Reuters also cited ANZ analysts noting that "Crude Oil recorded its biggest weekly fall in 11 months amid a darkening economic backdrop. Weak jobs data in the US on Friday raised concerns over flagging Oil demand in the world's biggest consumer."
The US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) added 142,000 jobs in August, below the forecast of 160,000 but an improvement from July’s downwardly revised figure of 89,000.
Weak US jobs data increased the likelihood of a 25 basis-point rate cut by the Federal Reserve (Fed) at its September meeting. Lower interest rates generally boost Oil demand by stimulating economic growth and making Oil cheaper for holders of non-dollar currencies.
According to the CME FedWatch Tool, markets are fully anticipating at least a 25 basis point (bps) rate cut by the Federal Reserve at its September meeting.
Additionally, Chicago Fed President Austan Goolsbee remarked on Friday that Fed officials are starting to align with the broader market's sentiment that a policy rate adjustment by the US central bank is imminent, according to CNBC.
FXStreet’s FedTracker, which uses a custom AI model to evaluate Fed officials' speeches on a dovish-to-hawkish scale from 0 to 10, rated Goolsbee's comments as dovish, assigning them a score of 3.2.
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