Oil prices saw a jump

Business Business. Oil prices jumped on Thursday on expectations that a possible U.S. interest rate cut would boost activity in the U.S. economy and fuel consumption, but concerns over slowing global demand limited gains. Brent crude futures rose 70 cents, or 0.9 percent, to $80.46 a barrel at 1222 GMT, recouping some of the previous day’s losses. U.S. West Texas Intermediate crude futures rose 76 cents, or 1 percent, to $77.74 a barrel. Both benchmarks fell more than 1 percent on Wednesday after an unexpected rise in U.S. crude stockpiles. U.S. consumer prices rose modestly in July and the annual rise in inflation fell below 3 percent for the first time in nearly 3-1/2 years, reinforcing expectations that the Federal Reserve will cut interest rates next month. “Crude oil prices rose marginally during the early European session on rising risks of escalating confrontation in the Middle East,” said Milad Azar, market analyst at brokerage firm XTB.

“Optimism that a possible US interest rate cut will boost economic growth and fuel consumption has also boosted oil prices.” Prices were also supported by concerns over Iran’s possible response to the killing of the leader of Palestinian militant group Hamas last month. Three senior Iranian officials have said only a ceasefire agreement in Gaza could prevent Iran from directly retaliating against Israel for the killing. Geopolitical risks loom over the oil market. “It is still unclear how and whether Iran will retaliate against Israel,” ING analysts said. But ANZ analysts said in a client note that a rise in oil inventories has raised concerns of weak demand. US crude oil inventories rose by 1.4 million barrels in the week ended Aug. 9, compared with estimates that they would rise by 2.2 million barrels, the first time since late June. China’s factory output growth slowed in July while refinery output fell for a fourth month, reflecting a slowdown in the country’s economic recovery, which also limited market gains.