Oil prices rose for a fifth consecutive session on Monday amid supply concerns driven by the rise in Middle East tensions. Rising tension between Israel and Iran has offset optimism about U.S. economic data later this week that is supposed to show signs of economic strength.
Brent crude futures rose by $80.39 per barrel, while the U.S. benchmark West Texas Intermediate crude futures rose by 1.2%, or 88 cents, to $77.72. Over the course of last week, Brent crude gained 3.7% while West Texas Intermediate surged by 4.5%. This came amid optimism over the incoming US economic data as well as rising hopes that the Federal Reserve will decide to reduce its interest rates during its next policy meeting.
According to three US central bankers, inflation appears to be on a steady decline, which should encourage the Fed to lower its interest rates when it convenes in September. In addition to an anticipated moderate rise in the Consumer Price Index when it’s released on Wednesday, the central bank is also expected to find encouragement from the recently released weekly jobless claims data which fell more than expected last week. “Support is coming from last week’s better-than-expected US data which eased fears of a US recession,” G markets analyst Tony Sycamore observed, acknowledging a rise in optimism in investors’ U.S. economic outlooks.