Oil prices were little changed on Friday as signs of further economic stimulus in China, data showing a decline in US crude oil inventories and uncertainty about the Federal Reserve's (Fed) next steps were offset by possible supply recovery in Libya.
International benchmark Brent crude increased by 0.05% to $70.95 per barrel at 10.32 a.m. local time (0732 GMT), up from the previous session's close of $70.91.
US benchmark West Texas Intermediate (WTI) fell by 0.02% to $67.34 per barrel after closing at $67.36 in the prior session.
The People's Bank of China (PBoC), which announced a series of measures to stimulate the economy this week, declared that it has reduced the reserve requirement ratios for banks and credit institutions by 50 basis points.
Experts note that China's economic stimulus moves could help the country achieve its growth targets, in turn raising the expectation of a recovery in oil demand from the world's largest crude oil importer and supporting upward price movements.
Data from the US Energy Information Administration (EIA) released late Wednesday supported prices, reflecting market perceptions of a stronger domestic demand.
US commercial crude stocks fell by around 4.5 million barrels for the week ending Sept. 20, higher than the market prediction of about 1.3 million barrels draw. Over the same period, gasoline inventories fell by around 1.5 million barrels.
Moreover, expectations for a 50 basis point cut by the Fed in November fell to 50% after macroeconomic data eased recession concerns, but remained strong.
The estimates that the Fed will cut rates by 75 basis points by the end of the year have been recorded as 88%. It is anticipated that the country's rate drop will weaken the US dollar against other currencies, boosting oil demand.
On the other hand, the expectation that oil production will return to normal levels with the agreement reached in Libya, curbed further price uptick.
The UN Support Mission in Libya announced Wednesday that Libya's House of Representatives and the High Council of State in Tripoli reached an agreement to appoint the head and deputy of the Central Bank.
The oil supply in the country is expected to recover and approximately 500,000 barrels of Libyan oil per day is likely to return to the global market resulting from this decision.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr