ENERGY MARKETS - Oil prices set to end week higher after U.S. rate cut
Istanbul, September 20 (Hibya) - Oil prices, little changed in early Asian trade on Friday, were on track to end higher for a second straight week following a large cut in U.S. interest rates and declining global stockpiles.
Brent futures, trading 19 cents or 0.3 percent lower at $73.69 a barrel at 0027 GMT on Friday, gained 4.3 percent this week. U.S. crude, up 6 cents at $72.01 a barrel, has registered weekly gains of 4.8 percent. The benchmarks have been recovering since they fell to near three-year lows on Sept. 10 and have registered gains in five of the seven sessions since then.
On Wednesday, the U.S. central bank cut interest rates by half a percentage point. Interest rate cuts typically boost economic activity and energy demand, but some also saw the large cut as a sign of a weak U.S. labour market.
Government data showed on Wednesday that crude inventories in the U.S., the world’s top producer, fell to a one-year low last week.
According to the analysts, a counter-seasonal oil market deficit of around 400,000 barrels per day will support Brent crude prices in the $70 to $75 a barrel range during the next quarter.
Rising tensions in the Middle East also supported crude prices. Walkie-talkies used by the Lebanese armed group Hezbollah exploded on Wednesday following similar explosions of pagers the previous day.
Weak demand from China’s slowing economy weighed on prices, with refinery output 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.
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