• The WTI price is gaining value due to growing speculation about a Fed interest rate cut in September.
• The ECB cut interest rates by 25 basis points on Thursday.
• Oil prices gain as lower U.S. employment data raises hopes for two Fed rate cuts in 2024.

The price of West Texas Intermediate (WTI) crude continues to rise for a third session, reaching around $75.50 per barrel during Friday’s Asian session. The appreciation in oil prices can be attributed to growing speculation about an interest rate cut by the US Federal Reserve (Fed) in September, following a 25 basis point rate cut by the European Central Bank (ECB) on Thursday.

A Reuters poll conducted from May 31 to June 5 shows that almost two-thirds of economists now expect an interest rate cut in September. Additionally, the CME FedWatch Tool suggests that the probability of the Fed cutting rates by at least 25 basis points in September has increased to almost 70.0%, up from 51.0% the week before.

Lower US employment data raised hopes for two interest rate cuts by the US Federal Reserve (Fed) this year. Lower interest rates in the United States (US), the largest oil-consuming country, could stimulate economic activity and escalate demand for oil.

The ADP US Employer Change report shows 152,000 fresh workers were added to the payroll in May, the lowest number in four months and well below the forecast of 175,000 and a downwardly revised figure of 188,000 for April. U.S. jobless claims rose by 8,000 to 229,000 in the week ending May 31, topping market expectations of 220,000. This is the highest reading since an eight-month high of 232,000 recorded in early May. Traders are awaiting Friday’s release of U.S. employment data, including average hourly earnings and wages in the nonfarm sector.

On Sunday, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to extend most supply cuts until 2025. But the group allowed a phase-out of voluntary cuts in eight member countries starting in October. According to Reuters, more than 500,000 barrels per day (bpd) are expected to re-enter the market by December, and a total of 1.8 million bpd by June 2025.