Investing.com-- Oil prices rose slightly Tuesday, seeing persistent support from the prospect of interest rate cuts and supply disruptions caused by Hurricane Francine.
At 08:10 ET (12:10 GMT), Brent oil futures rose 0.2% to $72.88 a barrel, while West Texas Intermediate crude futures rose 0.3% to $69.24 a barrel.
Supply disruptions from Hurricane Francine linger
U.S. authorities said that more than 12% of crude production and 16% of natural gas output in the Gulf of Mexico remained offline following the impact of Hurricane Francine.
Extended disruptions in U.S. production herald tighter supplies in the country, presenting some upside for crude prices.
But oil producers in the region were seen working to bring production back online in the past few days, meaning the impact of this disruption could be short-lived.
Fed meeting, interest rate cut in focus
Away from this, the focus this week was squarely on the conclusion of a Federal Reserve meeting on Wednesday, where the central bank is widely expected to cut interest rates.
Bets on a bigger, 50 basis point cut have grown in recent sessions, with the Fed also expected to kick off an easing cycle from Wednesday.
This notion weighed on the dollar, which benefited oil prices. The prospect of lower interest rates also presented a brighter outlook for oil demand, given that lower rates foster economic growth.
Demand fears limit oil’s upside
But further gains in oil were held back by persistent concerns over slowing demand, especially in top importer China.
Oil prices were also nursing a tumble to near three-year lows from last week, after concerns over China saw the Organization of Petroleum Exporting Countries and the International Energy Agency both cut their demand outlook for the coming years.
A string of weak economic data released over the weekend brewed more concerns over slowing growth in China, especially as the world’s biggest oil importer grapples with deflation.
Chinese oil refinery output fell for a fifth month in August amid declining fuel demand and weak export margins.
Fears of a renewed trade war between China and the West also dented sentiment towards the country.
(Ambar Warrick contributed to this article.)