<a href="https://www.thenationalnews.com/business/energy/2024/03/01/oil-on-track-to-post-weekly-gain-on-opec-supply-cut-extension-hopes/" target="_blank">Oil prices </a>closed lower on Friday and posted a weekly loss, despite interest rate cut hopes in the US and an extension of oil production cuts by Opec and its allies including Saudi Arabia and Russia. <a href="https://www.thenationalnews.com/business/energy/2024/02/23/oil-prices-dip-as-fed-officials-warn-against-starting-rate-cuts-early/" target="_blank">Brent</a>, the benchmark for two thirds of the world’s oil, settled 1.06 per cent lower at $82.08 a barrel. West Texas Intermediate, the gauge that tracks US crude, slid 1.17 per cent to settle at $78.01 a barrel. Crude prices were down for the week, with Brent off 1.8 per cent and WTI losing 2.5 per cent. Oil prices rose earlier on Friday but fell on demand concerns in China. “The expectation that both the Fed and the ECB [European Central Bank] are moving closer to a rate cut certainly helps improve appetite in oil, along with the lower-than-expected US inventories and [the] Opec+ decision to extend production cuts to the second quarter,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, told <i>The National.</i> The total US motor petroleum inventories in the US decreased by 4.5 million barrels last week, while distillate stockpiles were down by 4.1 million barrels, the latest Energy Information Administration figures show, indicating higher fuel demand. The Federal Reserve has also indicated it is willing to cut interest rates after a series of increases in the past two years aimed at bringing down inflation. “We are waiting to become more confident that inflation is moving sustainably to 2 per cent,” Reuters<i> </i>quoted Federal Reserve chairman Jerome Powell as saying. <b>“</b>When we do get that confidence – and we’re not far from it – it will be appropriate to begin to dial back the level of restriction so that we don’t drive the economy into recession.” Production cuts by Opec and its allies are also supporting oil prices. Several members of the Opec+ group, including Saudi Arabia, the UAE and Kuwait, this week <a href="https://www.thenationalnews.com/business/energy/2024/03/03/saudi-arabia-extends-voluntary-oil-output-cuts-until-mid-year-to-stabilise-market/" target="_blank">announced extensions to oil production cuts</a> as part of efforts to support market balance and <a href="https://www.thenationalnews.com/business/energy/2024/03/01/oil-on-track-to-post-weekly-gain-on-opec-supply-cut-extension-hopes/" target="_blank">stability</a>. In total, Opec+ members are extending additional voluntary cuts of 2.2 million barrels a day to the end of the second quarter, the Opec secretariat said. The move is in addition to the cuts announced in April last year, which have been extended until the end of December. Despite bullish factors supporting oil prices, uncertainties remain, especially regarding China's capacity to boost growth. Ms Ozkardeskaya said growing supply from non-Opec countries “will likely keep the US crude bears alert, into and above the $80 per barrel psychological level”. “That being said, from a technical standpoint, crude oil has stepped into the medium-term bullish consolidation zone and gains are expected to extend to $82 per barrel.” China’s post-pandemic economic recovery has fallen short of expectations as a result of a domestic property slump, weak manufacturing, reduced consumer spending and other factors. The IMF projects <a href="https://www.thenationalnews.com/business/economy/2023/07/17/chinas-economy-expands-63-in-second-quarter-but-misses-estimates/">China's </a>GDP expansion will hit 4.6 per cent this year and 4.1 per cent in 2025.