Crude oil futures saw a modest decline on Monday, following a week of gains, as traders adjusted their positions ahead of the Federal Reserve’s meeting later this week, where a rate cut is widely expected.
Profit-taking and reduced market activity ahead of the holiday season contributed to the cautious mood among investors. This sentiment has introduced a slightly bearish outlook for global crude prices in the short term, as market participants recalibrate their strategies in response to anticipated policy changes.
Despite the pullback, oil prices have remained near their year’s lows, trading within a narrow range for several months amid ongoing market uncertainty. Geopolitical tensions, however, have provided some support, with concerns over potential new U.S. sanctions on Russia and Iran. U.S. Treasury Secretary Janet Yellen reiterated efforts to limit Russia’s oil revenue, further underpinning market sentiment.
Expectations of a rate cut by the Federal Reserve, along with recent cuts by other central banks, have also offered some encouragement for the market. The combination of these accommodative monetary policies and ongoing supply constraints could help stabilize prices to a certain degree.
However, forecasts pointing to abundant oil supply in 2025, coupled with signs of weakening demand from China, could temper bullish momentum, limiting any significant price upside in the near term.
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