Oil prices are weakly rising on Wednesday after a jump of more than 3% in the previous session.
The previous day, the growth of quotations was contributed by the reduction of one of the key interest rates of the People’s Bank of China (PBOC), as well as reports that Beijing is preparing additional measures to stimulate economic activity in the country.
August Brent crude futures on London’s ICE Futures Exchange stood at $74.45 a barrel by 8:10 a.m. Wednesday, up $0.16 (0.22%) from the previous session’s close. Those contracts rose $2.45 (3.4%) to $74.29 a barrel on Tuesday.
The price of WTI futures for July oil grew by $0.08 (0.12%) to $69.5 per barrel at electronic trades of New York Mercantile Exchange (NYMEX) by that time. Contracts rose $2.3 (3.4%) to $69.42 a barrel in the previous session.
“China’s move toward new stimulus provides support for the oil market,” said Schneider Electric analyst Robbie Fraser, quoted by Market Watch. – The Chinese central bank’s key interest rate cut gives hope that policy easing could translate into stronger economic growth this year.”
As reported, the NBK on Tuesday cut the seven-day reverse repo rate to 1.9 percent from 2 percent.
The oil market was also supported by Bloomberg’s report that the U.S. authorities plan to replenish the strategic oil reserve (SPR) by 12 million barrels this year.
Traders’ attention on Wednesday is directed to the meeting of the Federal Reserve. Investors expect that a significant weakening of inflation will allow the Fed to pause in the cycle of tightening monetary policy and keep the benchmark interest rate unchanged (at 5-5.25%) at the June 13-14 meeting, notes Market Watch.
