ENERGY MARKETS – Oil edges higher as U.S. interest rate cut counters weak demand

Brent crude futures for November increased by 14 cents, or 0.19 percent, to 74.63 dollars a barrel by 0815 GMT. U.S. crude futures for November were up 16 cents, or 0.23 percent, at 71.16 dollars.

Both contracts registered their second consecutive weekly gains last week after the U.S. Federal Reserve cut interest rates by half a percentage point, a larger decrease in borrowing costs than many expected.

A softer economic outlook from China, the top consumer, capped further gains. However, heightened conflict in the Middle East could curtail regional supply.

Also, oil prices edged up on worries about an escalation of the conflict in the Middle East after Lebanon-based Hezbollah launched dozens of rockets at Israel, with both sides threatening to ramp up hostilities.

The Israeli military launched its most widespread wave of air strikes against Iran-backed Hezbollah, targeting Lebanon’s south, eastern Bekaa Valley and the northern region near Syria simultaneously after nearly a year of conflict.

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