LONDON: Oil prices were little changed on Monday after Joe Biden announced he would not seek a second term as US president, while investors watched for more signs that US interest rates could be cut as early as September.
Brent crude futures dipped 9 cents to $82.54 a barrel by 0933 GMT and US West Texas Intermediate crude futures was down 19 cents at $79.94.
Brent crude has remained relatively steady in the past month, hovering between $82 and $88 a barrel.
The US Federal Reserve is due to review policy next on July 30-31, when investors expect it to keep rates unchanged, though there have been indications that a cut will happen at the September meeting.
News that President Biden decided on Sunday to abandon his re-election bid was not a major factor for oil markets. He has endorsed Vice President Kamala Harris as the candidate who should face Republican Donald Trump in the November election.
“We think the ability of the US president to influence US oil production is probably overrated,” said Suvro Sarkar, energy sector team lead at DBS Bank, noting that US output reached record highs last year despite the Biden’s administration’s moves to address climate change.
“If anything, a Trump presidency could influence higher demand for oil in the US, given his anti-EV stance,” Sarkar added. That could offset some of the support markets have gained from recent OPEC+ production cuts, said IG analyst Tony Sycamore.
Oil prices drift lower
The flipside to unrestricted oil production in the US could well be lower oil prices, which may have the unintended impact of forcing marginal producers to mothball production, Sycamore added.
China’s slower than expected economic growth of 4.7% in the second quarter sparked concerns last week over the country’s demand for oil and continues to weigh on prices. On Monday, China surprised markets by lowering a key short-term policy rate and benchmark lending rates to boost the economy.
On Sunday China released a policy document after a leaders’ meeting that largely outlined known ambitions, from developing advanced industries to improving the business environment.
Analysts did not spot any imminent sign of structural shifts in the world’s second-biggest economy.
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