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Oil little altered as markets weigh China data, Fed rate cut

Oil prices were steady on Monday, as optimism around strong factory activity in China was largely offset by issues that the U.S. Federal Reserve will not cut interest rates once again at its December meeting.

Brent unrefined futures slipped 8 cents, or 0.13%, to $ 71.75 a barrel by 12:40 p.m. EST (1740 GMT) while U.S. West Texas Intermediate unrefined reduced 3 cents, or 0.04%, to $ 67.99.

An economic sector survey showed China's factory activity broadened at the fastest rate in 5 months in November, enhancing Chinese company optimism simply as U.S. President-elect Donald Trump increases his trade risks.

Meanwhile, a ceasefire between Israel and Lebanon, which worked last Wednesday, appeared progressively fragile. Lebanese authorities said that at least 2 people were eliminated on Monday in Israeli strikes on southern Lebanon.

Israeli Prime Minister Benjamin Netanyahu said on Monday that Israel would respond highly after the Iran-backed Lebanese armed group Hezbollah, citing repeated Israeli ceasefire violations, performed a strike on an Israeli military position.

The Pentagon said on Monday that despite some incidents, the ceasefire in between Israel and Lebanese armed group Hezbollah was holding.

Increased geopolitical risks stay. Although the ceasefire is underway in Israel, it appears obvious that there are some misunderstandings about the authenticity of the ceasefire, said Dennis Kissler, senior vice president of trading at BOK Financial.

Traders likewise enjoyed advancements in Syria, weighing whether current escalation might broaden stress throughout the Middle East and impact supply.

Both crude criteria fell more than 3% last week, pressured by alleviating supply concerns from the Israel-Hezbollah conflict and 2025 surplus forecasts, regardless of expected continual output cuts.

The Company of the Petroleum Exporting Countries and its allies, together referred to as OPEC+, delayed the group's next satisfying to Dec. 5. It will go over postponing a prepared oil output increase set up to start in January, OPEC+ sources told Reuters recently.

Attention will be on the possible delay of the planned production walking, as an indefinite hold-up could ease downward pressure on costs, stated George Pavel, general manager at Naga.com Middle East.

Today's meeting will choose policy for the early months of 2025.

Money managers are sitting on the fence ... the marketplace is searching for clearness between the implication of the forthcoming Trump administration and OPEC+ supply policy, said Harry Tchilinguirian at Onyx Capital Group.

Injuring costs, nevertheless, Atlanta Federal Reserve President Raphael Bostic said on Monday he has an open mind about whether to cut rates of interest once again at the Fed's December meeting, with upcoming information on tasks essential in shaping the decision.

Higher rates of interest increase the cost of borrowing, which can slow financial activity and dampen need for oil.

(source: Reuters)