Oil prices headed for a second week of declines on Friday as an unabating supply glut weighed even as China’s latest interest rate cut raised hopes for stronger demand from the world’s top energy consumer.
Benchmark Brent crude oil fell 38 cents to $47.70 a barrel by 1330 GMT, and was on course for a weekly decline of more than 5.5 percent.
U.S. crude for December was down 88 cents at $44.50 a barrel, on course for a near 6 percent weekly decline.
The People’s Bank of China (PBOC) cut its benchmark one-year lending rate for the sixth time since November by 25 basis points to 4.35 percent in its latest effort to boost the country’s economy whose rapid growth stalled.
But the positive tone was offset by persistent concerns over a glut in global crude oil and refined product supplies which have battered the energy market for over a year.
“The rate cut does give some support to demand expectations so oil’s gone a bit higher and it’s a little bit positive for the moment,” said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
“However as soon as supply data comes out, and people see we are in an oversupplied market, sentiment will come off.”