Oil climbs to 2-week high on Fed rate-cut signals, supply concerns
Oil prices edged up nearly 1% to a two-week high on Friday on increasing expectations the U.S. Federal Reserve will cut interest rates next week, which could boost economic growth and energy demand, as well as geopolitical uncertainty that could limit supplies from Russia and Venezuela.
Brent futures rose 49 cents, or 0.8%, to settle at $63.75 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 41 cents, or 0.7%, to settle at $60.08.
Those were the highest closes for both crude benchmarks since November 18.
For the week, Brent was up about 1% and WTI was up about 3%, marking a second straight weekly gain for both contracts.
Investors digested a U.S. inflation report and recalibrated expectations for the Fed to reduce rates at its December 9-10 meeting.
U.S. consumer spending increased moderately in September after three straight months of solid gains, suggesting a loss of momentum in the economy at the end of the third quarter as a lackluster labor market and the rising cost of living curbed demand.
Traders have been pricing in an 87% chance that the Fed will lower borrowing costs by 25 basis points next week, according to CME Group's FedWatch Tool.
Separately, top Chinese and U.S. officials held a call on Friday to discuss trade, including ongoing efforts to implement an agreement to their trade war.
In other trade news, U.S. President Donald Trump said he will meet with the leaders of Mexico and Canada to discuss trade issues on Friday after they gather in Washington for the 2026 World Cup draw.
Any talks that could reduce trade tensions between the U.S. and other nations could boost economic growth and energy demand.
Source: Reuters.com
