Oil prices were trading slightly lower on Monday as U.S. crude production resumed after Hurricane Francine and concerns over weaker economic data from China sapped sentiment.
By 12:00 pm AEST (2:00 am GMT) Brent crude futures and U.S. crude futures fell 0.5% and 0.4%, respectively.
Both benchmarks had closed lower in the previous session as U.S. Gulf of Mexico crude production began to recover after disruptions caused by Hurricane Francine. Additionally, a weekly rise in U.S. rig counts signaled a rebound in supply, further capping oil price gains.
Despite the recovery, approximately 20% of crude oil production and 28% of natural gas output in the Gulf remain offline due to the hurricane.
This week, market attention is focused on the U.S. Federal Reserve’s interest rate decision following its Sept. 17-18 meeting. Investors are increasingly betting on a 50-basis-point rate cut instead of the initially expected 25 bps, according to the CME FedWatch tool.
Lower interest rates could reduce borrowing costs, potentially boosting economic activity and oil demand.
Meanwhile, China's economic slowdown continues to weigh on the oil market. The world's largest oil importer saw industrial output growth in August drop to a five-month low, while retail sales and new home prices weakened further. Oil refinery output also fell for the fifth consecutive month due to sluggish fuel demand and weak export margins.
In global geopolitical news, the U.S. dollar remained steady after the FBI reported an apparent second assassination attempt on Republican presidential candidate Donald Trump at his Florida golf course.
In the Middle East, Israeli Prime Minister Benjamin Netanyahu vowed to impose a "heavy price" on Iran-aligned Houthis, who for the first time reached central Israel with a missile strike on Sunday.
