Investing.com– Oil prices cut losses Friday, to remain on track for a weekly gain as a bumper U.S. interest rate cut helped quell some fears of slowing demand.
At 1:43 p.m. ET (1743 GMT), rose 0.01% to $74.89 a barrel, while added 0.3% to $71.39 a barrel.
Oil heads for weekly gains on rate cut cheer
Crude prices have staged a strong recovery from near three-year lows hit earlier in September, with a bulk of their rebound coming this week as the dollar retreated on a by the Federal Reserve.
and WTI futures were trading up around 4% for the week.
Geopolitical tensions in the Middle East intensified, aiding crude as Israel struck Beirut and claimed to have killed a senior Hezbollah commander. Earlier this week, Israel allegedly exploded pagers and walkie talkies belonging to Hezbollah members, sparking vows of retaliation. Fighting in and around Gaza also continued.
A softer also helped prices after the Fed cut interest rates by the top end of market expectations and announced an easing cycle, which traders bet will help spur economic growth in the coming quarters.
Lower rates usually bode well for economic activity, which in turn is expected to buoy crude demand.
Rig counts unchanged
The number of oil rigs operating in the U.S. was unchanged at 488 from a week earlier, according to data Friday from energy services firm Baker Hughes.
The unchanged rig count comes as production was disrupted recently in the wake of the impact from Hurricane Francine.
China demand concerns persist
But China remained a key point of contention for crude markets, as economic readings from the world’s biggest oil importer showed little signs of improvement.
The People’s Bank of China kept unchanged on Friday, despite mounting calls on Beijing to unlock more stimulus for the economy.
Data released earlier in September showed Chinese refinery output slowed for a fifth straight month in August, while the country’s oil imports also remained mostly weak.
Concerns over China dragged oil prices to a near three-year low earlier this month, and have limited any major recovery in crude.
“China has obviously been the key concern when it comes to demand, but there have also been reports of refiners in Europe cutting run rates due to poor margins,” said analysts at ING, in a note.
(Peter Nurse, Ambar Warrick contributed to this article.)
