Crude futures are “well bid on the back of rising expectations of a rate cut in the U.S.,” ANZ Research said in a morning note, according to a Reuters report, adding that optimism over Sino-U.S. trade talks and Middle East tensions are also supporting prices.
Asian stocks also rose on the Fed rate cut expectations.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.35%.
“Up until now, many market participants had been on the sidelines while the markets factored in the likelihood of the Fed’s rate cut,” Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities, told Reuters regarding gains by Asian stocks.
“But with the Fed decision looming close some participants appear to be shaking off the caution and buying,” he added.
A meeting later in the day between United States and Chinese trade negotiators will be also closely watched by investors, despite low expectations for a breakthrough.
Middle East markets
Saudi Arabia’s index fell 1.5% with all banking shares dropping and Al Rajhi Bank plunging 3% in the biggest drag on the index.
Saudi Basic Industries Co (SABIC), the world's fourth-biggest petrochemicals firm, shed a further 1.6%, extending losses from the last session after reporting its lowest quarterly profit since late 2009.
Dubai's index rose 1.2% to 2,881 points, buoyed by real estate shares which all rose. Developer Emaar Properties jumped 3.9% to a level not seen since August 7 last year.
In Abu Dhabi, the index closed 0.3% higher, recovering from losses in the last session when it snapped eight days of winning streak.
In Qatar, the index recouped earlier losses to close up 0.3%, with Qatar National Bank gaining 1% and Commercial Bank rising 1.3%.
Egypt’s blue-chip index dropped 0.3%, Kuwait’s premier market index gained 0.3% while Oman’s index edged up 0.1% and Bahrain’s index gained 0.6%.
The dollar edged up early on Tuesday.
The dollar index .DXY, which measures the greenback against a basket of six major currencies, was a shade higher at 98.106.
Gold prices edged lower early on Tuesday.
Spot gold fell 0.3% to $1,422.81 per ounce at 0128 GMT.
U.S. gold futures gained 0.2% to $1,422.50 an ounce.
(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)
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