Oil closes with slight declines but marks its second consecutive week of gains thanks to the Fed
Brent futures fell 39 cents, or 0.52%, to $74.49 per barrel, while U.S. WTI crude futures slipped 3 cents, or 0.04%, to $71.92.
Oil prices saw little change this Friday but posted their second consecutive weekly gain, supported by the Fed’s significant interest rate cut and a drop in U.S. supply.
Brent futures fell 39 cents, or 0.52%, to $74.49 per barrel, while U.S. WTI crude futures slipped 3 cents, or 0.04%, to $71.92.
Signs of a slowdown in China’s economy, a major consumer of raw materials, limited price gains, though both contracts rose around 5% over the week.
Prices have rebounded after Brent dropped below $69 on September 10, marking the first time it had fallen below that level in nearly three years. The market concluded that oil below $70, along with weak hedge fund confidence in rising crude and fuel prices, would only be justified by a recession—a risk that this week’s substantial U.S. interest rate cut helped to alleviate.
Prices climbed more than 1% on Thursday, a day after the U.S. central bank’s decision to lower interest rates by half a percentage point.
Interest rate cuts typically boost economic activity and energy demand, though some analysts are concerned about weakness in the U.S. labor market. U.S. rate cuts have supported risk appetite, weakened the dollar, and boosted crude this week. However, it will take time for rate cuts to fully support economic activity and drive demand growth for oil.
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