WASHINGTON (dpa-AFX) - Oil prices moved higher on Thursday with rising tensions in the Middle East raising possibility of disruptions in supply. Oil prices were also supported by the Federal Reserve's decision to cut interest rate by 50 basis points, and the recent data showing a larger than expected drop in U.S. crude inventories last week.
West Texas Intermediate Crude oil futures for October ended up by $1.04 or about 1.5% at $71.55 a barrel.
Brent crude futures were up $1.10 or about 1.5% at $74.75 a barrel a little while ago.
Data from the Energy Information Administration (EIA) Wednesday showed crude oil inventories decreased by 1.6 million barrels last week after rising by 0.8 million barrels in the previous week. Economists had expected crude oil inventories to edge down by 0.1 million barrels.
At 417.5 million barrels, U.S. crude oil inventories are about 4% below the five-year average for this time of year, the EIA added.
'I don't see anything in the economy right now that suggests that the likelihood of a recession -- sorry, of a downturn -- is elevated,' Fed Chair Jerome Powell said in a news conference on Wednesday, after the central bank cut interest rates by 50 basis points.
'You see growth at a solid rate, you see inflation coming down, and you see a labor market that's still at very solid levels, so I don't really see that,' Powell added.
Traders are also closely following the developments in the Middle East after walkie-talkies and handheld radios, acquired along with pagers aimed at over 3,000 Hezbollah members, exploded in three areas of Lebanon on Wednesday, resulting in 20 fatalities and injuring at least 450 people.
Security sources said Israeli spy agency Mossad was responsible, although Israeli officials did not comment on the attacks.
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