NEW YORK: Oil prices rose on Monday as the prospect of an expected interest rate cut by the US Federal Reserve overshadowed pessimism over US-China trade talks and worries about slower global economic growth.
Brent crude gained 25 cents to settle at $63.71 a barrel, while US West Texas Intermediate (WTI) crude futures rose 67 cents to settle at $56.87 a barrel.
“Prices appear to be treading water ahead of this week’s events,” said John Kilduff, partner at Again Capital Management.
Traders and investors are watching the Fed this week, with US central bankers expected to lower borrowing costs for the first time since the depths of the financial crisis more than a decade ago.
US 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. Elsewhere, disappointing economic data has increased concerns about slower growth.
US and Chinese negotiators meet this week for their first in-person talks since a G20 truce last month, but expectations are low after Trump said China might not want to sign a trade deal until after the 2020 US election.
“Today’s kickoff to some renewed trade negotiations between US and China will likely inspire some modest price support,” Jim Ritterbusch of Ritterbusch and Associates said in a note. “However, the mid-week Fed decision and associated commentary could prove to be this week’s larger driver of oil pricing.”
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 capture 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 US 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.
Oil edges up on prospect of US interest rate cut
Oil edges up on prospect of US interest rate cut
Kuwait to boost Islamic finance with sukuk regulation
- The move supports sustainable financing and is part of Kuwait’s efforts to diversify its oil-dependent economy
RIYADH: Kuwait is planning to introduce legislation to regulate the issuance of sukuk, or Islamic bonds, both domestically and internationally, as part of efforts to support more sustainable financing for the oil-rich Gulf nation, Prime Minister Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah said on Wednesday.
Speaking at the World Governments Summit in Dubai, Al-Sabah highlighted that Kuwait is exploring a variety of debt instruments to diversify its economy. The country has been implementing fiscal reforms aimed at stimulating growth and controlling its budget deficit amid persistently low oil prices. Hydrocarbons continue to dominate Kuwait’s revenue stream, accounting for nearly 90 percent of government income in 2024.
The Gulf Cooperation Council’s debt capital market is projected to exceed $1.25 trillion by 2026, driven by project funding and government initiatives, representing a 13.6 percent expansion, according to Fitch Ratings.
The region is expected to remain one of the largest sources of US dollar-denominated debt and sukuk issuance among emerging markets. Fitch also noted that cross-sector economic diversification, refinancing needs, and deficit funding are key factors behind this growth.
“We are about to approve the first legislation regulating issuance of government sukuk locally and internationally, in accordance with Islamic laws,” Al-Sabah said.
“This enables us to deal with financial challenges flexibly and responsibly, and to plan for medium and long-term finances.”
Kuwait returned to global debt markets last year with strong results, raising $11.25 billion through a three-part bond sale — the country’s first US dollar issuance since 2017 — drawing substantial investor demand. In March, a new public debt law raised the borrowing ceiling to 30 billion dinars ($98 billion) from 10 billion dinars, enabling longer-term borrowing.
The Gulf’s debt capital markets, which totaled $1.1 trillion at the end of the third quarter of 2025, have evolved from primarily sovereign funding tools into increasingly sophisticated instruments serving governments, banks, and corporates alike. As diversification efforts accelerate and refinancing cycles intensify, regional issuers have become regular participants in global debt markets, reinforcing the GCC’s role in emerging-market capital flows.
In 2025, GCC countries accounted for 35 percent of all emerging-market US dollar debt issuance, excluding China, with growth in US dollar sukuk issuance notably outpacing conventional bonds. The region’s total outstanding debt capital markets grew more than 14 percent year on year, reaching $1.1 trillion.
