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Stacked platforms are seen with other inactive oil rigs in Dickinson, North Dakota, June 26, 2015.
Andrew Cullen | Reuters
Oil prices rose on Friday as the chairman of the US Federal Reserve said he would "act appropriately" to support economic expansion amid the uncertainty surrounding world trade.
The Brent, the world benchmark, rose 52 cents, or 0.9 percent, to 61.47 dollars a barrel, while US West Texas Intermediate (WTI) crude oil rose 22 cents, or 0.4 percent. %, to establish at $ 56.52.
Both benchmarks had declined earlier due to fears of slowing US job growth and continued trade tensions between the US and China, despite recent diplomatic progress.
The Federal Reserve has the "obligation" to use our tools to support the economy, and that's what we will continue to do, "said Jerome Powell, Fed Chairman, at the University of Zurich, in a comment preceding the central bank policy meeting in mid-September. The Fed lowered its rates by a quarter point in July.
"Crude prices are going up," said Bill Baruch, president of Blue Line Futures LLC in Chicago. Powell's comments that further interest rate cuts would be a factor that would help keep "a bid on the market before the weekend".
Oil prices fell earlier in the session, as US government data showed that employment growth in the country slowed in August for the seventh consecutive month.
World oil demand is expected to grow by only 900,000 barrels a day in 2019 and 2020, said UBS oil analyst Giovanni Staunovo, in a note analyzing oil market trends.
Other forecasts for growth in oil demand were reduced to about 1 million bpd, against 1.3 million bpd previously, analysts said.
"We are leaving the US driving season," said Robert Yawger, director of energy futures at Mizuho in New York. "This is a very vulnerable position, the biggest concern is the growth of demand and it is a function of the (American) trade war with China."
The protracted trade dispute between the United States and China, the world's second-largest oil consumer, has had a dampening effect on oil prices, even though it has risen over the course of the year , partly thanks to production cuts led by the Organization of Petroleum Exporting Countries and Russia will drain its stocks.
Beijing and Washington agreed Thursday to hold high-level talks in October. The news has cheered investors in hopes of ending a trade war that has introduced exaggerated tariffs between the world's two largest economies, negating economic growth.
"If trade tensions worsen further, oil demand growth may slow further, requiring much lower prices," Staunovo said.
Brent should register its fourth consecutive weekly gain, up 1.9%, while US crude rose 2.8%, in anticipation of a second weekly increase, driven mainly by good economic statistics released Wednesday by China, the world's largest importer of oil.
WTI received further boost after the Energy Information Administration (EIA) announced Thursday that US crude stocks were down sharply last week – almost double the expectations – and for a third straight week.
Oil prices climbed more than 2% after the EIA report, although they were gradually challenged by investors who doubted the chances of the trade talks yielding results.
US crude output remains close to weekly highs, despite nine consecutive months of record cuts in the number of oil rigs.
US oil companies cut crude oil drilling rigs this week to four, bringing the total to 738, the lowest level in almost two years, according to energy services firm Baker Hughes of General Electric Co.
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