Oil prices for much of the month of September have edged down slightly, but steadily. Patrick DeHaan with Gasbuddy.com says right now, the balance of the global economy is driving oil prices.
“Weakness in China has long overshadowed oil driving oil prices. In the last week down to their lowest level since 2021. But as we say here this morning, a new week, the Federal Reserve may cut interest rates for the first time. In the last couple of years and that is pushing oil prices up on the optimism that potentially will boost demand.”
DeHaan was quick to note that optimism is just that, and oil prices are still hovering around the $70 mark.
What does he expect out of oil prices, should the fed cut interest rates? Will it have a short-term or long-term impact on oil prices, and thus, what we pay for our fuel?
“It’s all going to come down to the details that the Fed kind of surprises the market by making a larger cut than expected,” DeHaan said. “That could mean that the senses, some sort of economic slowdown, we’ll have to see on how all of it ends up transpiring. For now, the expectation is that the Fed will cut; I think it would be a more of a short term , impact. If there is a 25-basis point cut, whereas if there’s a 50-basis point cut, that may be a little bit more long lasting on oil markets that could move them into bearish territory.”
DeHaan noted at this point, Hurricane Francine, which made landfall on Louisiana over the weekend has had a very minimal impact on oil prices.
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