Oil edges up on prospect of U.S. interest rate cut and War in the Gulf

NEW YORK (Reuters) – Oil prices edged higher on Monday as the prospect of an expected interest rate cut by the U.S. Federal Reserve overshadowed pessimism over U.S.-China trade talks and worries about slower global economic growth. Traders and investors are watching the Fed this week, with U.S. central bankers expected to lower borrowing costs for the first time since the depths of the financial crisis more than a decade ago. U.S. President Donald Trump said a small Fed rate cut “is not enough.” Economic growth in the United States slowed less than expected in the second quarter, strengthening the outlook for oil consumption. Crude prices were also supported by supply risk as tensions remained high around the Strait of Hormuz, through which about a fifth of the world’s oil passes. Tensions have spiked between Iran and the West after Iranian commandos seized a British-flagged oil tanker in the Gulf this month in apparent retaliation for the seizure of an Iranian tanker by British forces near Gibraltar. Britain told Iran that if it wants to “come out of the dark” it must follow international rules and release the British-flagged tanker. Following the end of a waiver on U.S. sanctions at the start of May, China’s crude oil imports from Iran sank almost 60% in June from a year earlier, Chinese customs data showed on Saturday.