Oil prices up following Fed's large interest rate cut

WASHINGTON DC, UNITED STATES - NEW YORK, UNITED STATES - ELMET, TATARSTAN (FILE FOOTAGE) Oil prices increased on Thursday after the US Federal Reserve (Fed) cut its interest rate by 50 basis points on Wednesday, starting its monetary easing in an aggressive way. International benchmark Brent crude rose by 1.13% to $74.48 per barrel at 10.57 a.m. local time (0757 GMT), up from the previous session's close of $73.65. US benchmark West Texas Intermediate (WTI) increased 1.24% to $70.75 per barrel after closing at $69.88 in the prior session. The Fed lowered the federal funds rate by 50 basis points Wednesday to a target range of 4.75%-5.0%. The move marked the first rate cut by the central bank in more than four years, since the beginning of the pandemic. The Fed also indicated that it plans to cut interest rates by an additional 50 basis points by the end of this year. Interest rate cuts typically boost economic activity and oil demand. Meanwhile, US commercial crude oil inventories decreased by around 1.6 million barrels to 417.5 million barrels, the lowest level in almost a year. Over the same period, gasoline inventories rose by around 100,000 barrels to 221.6 million barrels. The market players are also keeping an eye on events in the Middle East, where a vast majority of oil reserves are located. Renewed tensions in the key producing region increased concern of a possible output disruption and supported upward price movements. (Footage by AA/Anadolu Agency via Getty Images)