FX.co ★ Crude Oil Extends Rebound But Still Closes Lower For The Week

In a robust continuation of the upward trend observed in the prior session, crude oil prices surged again on Friday.

Oil futures for October delivery climbed by $1.82, or 2.5%, reaching $74.83 per barrel, following a $1.08, or 1.5%, increase to $73.01 per barrel in Thursday's trading session.

Despite this impressive two-day rally, crude oil prices recorded a 0.9% decline for the week due to an earlier sell-off.

The extended rebound in crude oil futures likely reflects growing optimism regarding U.S. demand prospects, following comments from Federal Reserve Chair Jerome Powell, who indicated that the central bank is ready to start reducing interest rates.

"The time has come for policy to adjust," Powell stated at the Jackson Hole Economic Symposium, though he emphasized that "the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."

Powell's readiness to initiate rate cuts emerges from his heightened confidence that inflation is on a credible path back to the 2% target.

Fed officials have consistently maintained that they need "greater confidence" that inflation is moving sustainably toward their 2% target before considering any rate reductions.

Powell's remarks come amidst recent inflation data that has bolstered expectations for a rate cut at the Fed's forthcoming monetary policy meeting in September.

However, crude oil prices remain significantly below their recent peaks, as concerns about China's demand outlook continue to eclipse geopolitical factors.