Hurricane, Fed and war: three factors affecting oil

Oil prices rose in Asian trading on Monday, influenced by several factors at once. Rising tensions in the Middle East have forced investors to raise their risk premium, and expectations of further interest rate cuts have boosted hopes for an improvement in oil demand.

November futures for Brent and WTI show a two-week rebound from almost three-year lows. The price increase is due to supply disruptions caused by Hurricane Francine, which may lead to a reduction in supply.

The US Federal Reserve's interest rate cut last week, as well as its intention to continue this easing cycle, support expectations of economic growth and, as a result, an increase in oil demand. In the coming days, new signals from the Fed will be published, including speeches by Chairman Jerome Powell and data on the PCE price index.

The meetings of the Swiss and Swedish central banks, where interest rates are expected to decrease, may also affect the dynamics of oil prices.

Nevertheless, maintaining a high risk premium is due to the lack of visible signs of easing tensions in the Middle East. The ongoing fighting and threats of war in the region raise concerns that a large-scale conflict could disrupt oil supplies, leading to tougher conditions on the global oil market.