Shafaq News/ US light crude oil gained more than 2% a barrel on Friday after comments by US Federal Reserve Chair Jerome Powell indicated the central bank was preparing to cut interest rates.
Brent crude futures settled up by $1.80, or 2.33%, at $79.02 a barrel. US West Texas Intermediate (WTI) crude futures finished up $1.82, or 2.49%, at $74.83.
"The pivot by the Federal Reserve is real," said Phil Flynn, senior analyst at Price Futures Group. "It's impacting all commodities."
This week, both benchmarks hit their lowest since early January, after the US government sharply lowered its estimate of jobs employers added this year through March, raising fears of a possible recession.
On Friday, Powell endorsed easing the Fed's policies, saying further cooling in the job market would be unwelcome. He also expressed confidence inflation was within reach of the US central bank's 2% target.
"The upside risks to inflation have diminished. And the downside risks to employment have increased," Powell said in a highly anticipated speech to the Kansas City Fed's annual economic conference in Jackson Hole, Wyoming. "The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."
The US dollar index softened to about 101.45 ahead of the speech. A cheaper greenback typically lifts demand for dollar-denominated oil from investors holding other currencies.
Morgan Stanley said in a note on Friday that a drawdown in oil inventories has somewhat supported oil prices.
"For now, the balance in the oil market is tight, with inventories drawing approximately 1.2 million barrels per day in the last four weeks, which we expect will continue in the balance of [the third quarter]," the bank said.
Recent data from China, the top oil importer, has pointed to a struggling economy and slowing oil demand from refiners. A renewed push for a ceasefire in Gaza between Israel and Hamas has also helped ease supply worries and weighed on oil prices.
US and Israeli delegations started a new round of meetings in Cairo on Thursday to resolve differences over a truce proposal.
Ceasefire talks to stop the war in Gaza have reduced fears the conflict would impact crude oil supplies.
US energy firms this week cut the number of oil and natural gas rigs operating for a second week in a row, energy services firm Baker Hughes said on Friday.
The number of oil rigs was unchanged at 483 this week, while gas rigs fell by one to 97.
(Reuters)