ANKARA 

Oil prices rose on Monday, spurred by hope of an interest rate cut by the US Federal Reserve (Fed) and a prolonged blockade in cease-fire negotiations in the Middle East.

International benchmark Brent crude rose 0.73% to $78.72 per barrel at 09.33 a.m. local time (0633 GMT), up from the previous session's close of $78.15.

US benchmark West Texas Intermediate (WTI) increased by 0.82% to $75.44 per barrel, after closing at $74.83 in the prior session.

On Friday, US Federal Reserve Chair Jerome Powell signaled an interest rate cut at the central bank's upcoming meeting in September. Commodity prices increased after Powell's much-anticipated speech at the annual Jackson Hole symposium in the US state of Wyoming.

A reduction in interest rates in the US, the world's largest oil consuming country, is expected to increase economic activity and raise oil demand.

Fed Chair Powell said his confidence has grown that inflation is on a sustainable path back to 2%, saying "time has come" for an adjustment in monetary policy.

"The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks," he told the annual Jackson Hole symposium.

He added that overall, the economy continues to grow at a solid pace.

Analysts are certain that the Fed will cut interest rates by 25 basis points next month, while the possibility of a 50 basis point cut is also on the table.

The pricing in the money market predicts that the Fed will cut interest rates by a total of 100 basis points by the end of the year, the probability of the Bank making a 50 basis point interest rate cut in September is 32.5%, and the probability of a 25 basis point interest rate cut is 67.5%.

The unsuccessful cease-fire negotiations in the Middle East, home to a vast majority of global oil reserves, contributed to price increases and heightened supply concerns among market players.

Despite international ceasefire negotiations, Israel hasn't slowed its attacks on the blockaded Gaza Strip. Since Oct. 7, 2023, the Israeli onslaught has resulted in over 40,400 Palestinian deaths, mostly women and children, and over 93,000 injuries, according to local health authorities.

The latest round of cease-fire talks ended in Cairo on Sunday without an agreement. The Palestinian group Hamas demanded Israel adhere to what was agreed upon on July 2, in accordance with a proposal by US President Joe Biden laid out on May 31 and a UN Security Council resolution.