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Investing.com — Oil prices rose slightly on Monday in Asian trade, but continued to fall sharply from last week as hopes for early U.S. interest rate cuts waned, while oil prices rose slightly from last week as hopes for a cease-fire in the Israel-Hamas war loomed large. The debate continues to attract attention. .
Rumors of a possible ceasefire in the war sent oil prices lower over the past week, as potential supply disruptions caused by the conflict were a key support for oil prices.
However, by the end of the week, no ceasefire had been reached, and clashes between Israeli and Hamas forces continued. Tensions also persist in the Red Sea between US-led forces and the Iran-aligned Houthis, with the latter threatening further attacks on shipping in the region.
Prices expiring in April rose 0.4% to $77.61 a barrel and rose 0.3% to $72.53 a barrel by 9:03 p.m. ET. . Both contracts each fell more than 7% last week.
Powell's comments carry weight as dollar strengthens
Crude oil prices edged higher on Monday after rebounding sharply on Friday. The data showed that the U.S. labor market was much more active than expected, giving the Fed even more room to keep interest rates steady for an extended period of time.
Adding to this belief, in an interview with CBS, the central bank reiterated its message that it will not lower interest rates in the short term. Powell said policymakers would ultimately cut rates this year, but the Fed would look for clearer signs of easing inflation and a cooling labor market before unwinding policy.
Powell's comments and strong labor market data factor into concerns that rising long-term interest rates will reduce global oil demand in coming months.
However, the Fed chairman also said that the U.S. economy remains strong and that a recession is unlikely. This bodes well for demand in the world's biggest fuel consumer, especially if interest rates start to fall later this year.
However, in the short term, U.S. fuel demand is expected to remain under pressure from severe weather across the country.
Elsewhere, reports from China showed service sector activity grew less than expected in January. The figures, which followed last week's weak official data, further heightened concerns about a slowing economic recovery in the world's biggest oil importer.
, the January portion is scheduled for later this week. The inflation figures are due to be released a day before the start of the country's week-long Lunar New Year holiday.
