Oil prices advance on back of Chinese interest rate cut

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by Market Moves Staff

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Oil prices of both the US and Brent crude varieties are advancing this afternoon, helped by a surprise cut in Chinese interest rates and hopes of support from the world’s most powerful central bank.

US light crude is up to around $86.50 per barrel, while Brent futures are firmly above $100 per barrel. The People’s Bank of China (PBoC) caught everyone on the hop at midday (London time) when it announced its first cut in interest rates since 2008.

The 25 basis point cut was taken as a signal that the world’s second-largest economy was serious about reinvigorating growth, although some were quick to observe that the change in policy probably suggests that upcoming Chinese economic data, including GDP in July, will be much weaker than previously thought.

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