WTI prices recover some lost ground near $74.30 on Friday.
The modest recovery in WTI prices is backed by expectations for Fed rate cuts and Chinese stimulus measures.
The US Nonfarm Payrolls report will be in the spotlight on Friday.
Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $74.30 on Friday. WTI prices snap the two-day losing streak amid the sign of potential interest rate cuts from the US Federal Reserve (Fed).
The modest recovery in WTI prices is supported by the market’s expectations for rate cuts this year after Fed Chair Jerome Powell indicated a peak of the rate hiking cycle during the press conference. It’s worth noting that lower interest rates typically stimulate economic growth which buoys oil demand.
China has revealed measures to encourage development in its faltering property sector. Chinese authorities' emergency reaction and $1 trillion (US$141 billion) yuan liquidity injection helped boost market confidence. The positive developments surrounding China’s economy might lift WTI prices, as China is the world's second-largest oil consumer.
On Thursday, the Organization of the Petroleum Exporting Countries (OPEC) committee said that the group’s members will discuss in March whether or not to extend voluntary oil production cuts in place for the first quarter. The committee said there would be no changes to OPEC’s decision to slash 2.2 million barrels per day from the market this quarter.
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