Oil prices fall but are set for a positive week after the investment rate cut

Investing.com– Oil prices edged lower in Asian trade on Friday as traders pared recent gains, with crude headed for a weekly gain as a mild U.S. interest rate cut helped ease some fears related to the slowdown in demand.

Crude oil prices have rebounded strongly from near three-year lows hit in early September, with most of their rebound coming this week as the dollar retreated on one by the Federal Reserve.

Heightened tensions in the Middle East also aided the brutality after Israel reportedly blew up pagers and walkie-talkies belonging to Hezbollah members, prompting vows of revenge. Fighting in and around Gaza also continued.

But despite the weekly gain, crude oil’s higher gains were hampered by lingering concerns about slowing demand, particularly in top importer China. US fuel demand also appeared to cool with the end of the busy summer travel season.

U.S. crude that expires in November was down 0.4 percent at $74.60 a barrel, while it was down 0.4 percent at $70.86 a barrel by 9:09 p.m. ET (01: 09 GMT).

Oil heads for weekly gains on rate cut

traded up about 3.4% this week, while WTI futures rose 4.6%.

A drop in crude oil prices helped after the Fed cut interest rates to the top of market expectations and announced an easing cycle, which traders bet would help boost economic growth in the coming quarters.

Lower rates are usually good for economic activity, which in turn is expected to support crude oil demand.

Concerns about China’s demand persist

But China remained a key point of contention for crude markets as economic readings from the world’s biggest oil importer showed little sign of improvement.

The People’s Bank of China was unchanged on Friday, despite growing calls in Beijing to unlock more stimulus for the economy.

Data released in early September showed Chinese refinery output fell for a fifth straight month in August, while the country’s oil imports also remained largely weak.

Concerns about China pushed oil prices to a near three-year low earlier this month and limited any major recovery in crude.