Offline capacity in Gulf of Mexico still supports prices
Markets await decision on Fed rate cut
Poor August data stokes China demand worries

SINGAPORE, Sept 16 Reuters Oil prices rose in Asian trade on Monday amid expectations of a U.S. interest rate cut this week, though gains were capped by persistent demand worries and weaker China data.

Brent crude futures for November were up 38 cents, or 0.5, at 71.99 a barrel at 0700 GMT. U.S. crude futures for October were up 49 cents, or 0.7, at 69.14 a barrel.

Both contracts had settled lower in the previous session, with concerns about supply disruptions easing as Gulf of Mexico crude production resumed following Hurricane Francine and as rising data showed a weekly rise in U.S. rig count.

Still, nearly a fifth of crude oil production and 28 of natural gas output in the Gulf of Mexico remain offline in the hurricane39;s aftermath.

Markets are focused on upcoming FOMC policy decisions and traders are likely to stay cautious, said Phillip Nova senior market analyst Priyanka Sachdeva, adding that prices are still supported by some supply worries given some capacity remains offline in the Gulf of Mexico.

The Federal Open Market Committee FOMC is expected to make a decision during its Sept. 1718 meeting.

Fed fund futures show investors are increasingly betting the U.S. central bank will cut by 50 basis points bps instead of 25 bps, according to CME FedWatch, opens new tab.

Lower interest rates typically reduce the cost…