Oil prices rose on Thursday after a major interest rate cut by Fed, but concerns about ongoing global demand capped gains.
November Brent crude futures rose 36 cents, or 0.5%, to $74.01 a barrel by 0618 GMT, while October WTI crude futures rose 34 cents, or 0.3%, to $71.15 a barrel.
Brent and WTI recovered after falling in early Asian trade.
Rate cuts typically boost economic activity and energy demand, but the market also saw them as a sign of a weak US labor market that could slow the economy.
The 50 basis point cut hinted at tough economic headwinds ahead, while investors were unsatisfied after the Fed raised its medium-term outlook for interest rates.
Weak demand from China’s slowing economy is also weighing on oil prices.
Refinery production in China slowed for a fifth month in August, according to weekend figures from the statistics bureau. China’s industrial output growth also slowed to a five-month low last month, and retail sales and new home prices weakened further.
Markets were also watching events in the Middle East, with pager explosions the day before followed by the explosion of radios used by the Lebanese armed group Hezbollah on Wednesday.
Security sources said Israel’s spy agency Mossad was responsible, but Israeli officials have not commented on the attacks.
Analysts expect a non-seasonal oil market deficit of around 0.4 million barrels per day (bpd) to support Brent crude prices in the range of $70 to $75 per barrel in the coming quarter, but this will be temporary.
While 2025 global oil balances deteriorate in most scenarios, renewed price weakness is still projected in 2025 with Brent on a path to $60 per barrel.
