Oil prices, which fell slightly on Friday, are on track to close a second straight week higher after a big cut in US interest rates and global inventories shrink.
Brent futures were down 12 cents, or 0.2%, at $73.76 a barrel by 0658 GMT on Friday. WTI crude futures are down 15 cents, or 0.2%, at $71.80 a barrel.
Brent gained 4.3% for the week, and WTI added 4.8% for the week.
After falling to near three-year lows on September 10, the indexes have rebounded and gained in five of the seven sessions.
Prices pared gains on Friday after rising more than 1% on Thursday following the US central bank’s decision to cut interest rates by half a percentage point on Wednesday.
Interest rate cuts typically boost economic activity and energy demand, but some see them as a sign of a weak U.S. labor market.
Prices have been under pressure in recent months amid concerns that demand will weaken as tight monetary policy holds back economic activity. The easing of monetary policy has helped bolster expectations that the U.S. economy will avoid a downturn.
Also supporting prices was a decline in U.S. crude inventories, which fell to a one-year low last week.
On Thursday, we reported that a nonseasonal oil market deficit of about 400,000 barrels per day (bpd) would support Brent crude prices in the $70 to $75 per barrel range next quarter, adding that prices could fall in 2025.
Crude prices are also being supported by rising tensions in the Middle East. Radios used by Hezbollah were detonated on Wednesday, similar to pagers, the previous day.
Security sources said Israel’s Mossad spy agency was responsible out of the action, but Israeli officials have not commented on the attacks.
By the way, weak demand from China’s slowing economy was weighing on prices, with refinery production in China slowing for a fifth month in August.
China’s industrial output growth also slowed to a five-month low last month, and retail sales and new home prices weakened further.
