The Fed's interest rate cut expectations coexist with demand concerns, and the rise in oil prices is limited

On September 16th, Jin10 Data reported that oil prices pumped during the Asian session on Monday, as the market expected a rate cut in the United States this week, but the continuous concerns about demand limited the gains. November Brent crude futures and October WTI crude futures both closed lower on the previous trading day, as crude oil production in the Gulf of Mexico resumed after Hurricane Frances, and data showed an increase in the number of drilling rigs in the United States, easing concerns about supply disruptions. Nevertheless, nearly one-fifth of crude oil production and 28% of natural gas production in the Gulf of Mexico are still shut down. Phillip Nova, Senior Market Analyst, Priyanka Sachdeva, said that the market is following the upcoming decision on the interest rate by the Fed, and traders may remain cautious. Given that some production capacity in the Gulf of Mexico is still shut down, supply concerns still support oil prices. Lower interest rates usually lower borrowing costs, thereby boosting oil demand. However, Kelvin Wong, Senior Market Analyst at Oanda, said that a 50-basis point rate cut by the Fed may raise concerns about oil demand.