Crude prices increased Friday as China cut interest rates to boost its economy.
China's central bank cut the benchmark interest rate for one- year deposits by 25 basis points to 2.75 percent and lowered the one-year lending rate by 40 basis points to 5.6 percent.
This is the first adjustment to the benchmark rates since July 2012. The move comes as the economy is under pressure with gross domestic product (GDP) expanding by 7.3 percent year on year in the third quarter, which was the slowest quarterly growth since 2009.
As China is the second-largest oil-consuming country of the world, traders believed that the rate cut will fuel the economy and add crude demand.
The market is closely watching the Organization of Petroleum Exporting Countries (OPEC)'s next meeting, which will be held in Vienna on Nov. 27. The organization pumps a third of the world's crude.
OPEC may cut its output target by no more than 500,000 barrels a day, according to a report of Bank of America. It also pointed out that countries like Saudi Arabia may prefer lower oil prices so as to discourage investment in North American shale oil.
U.S. crude stockpiles added 2.6 million barrels to 381.1 million barrels last week, according to a report released by the Energy Information Administration (EIA) Wednesday. Stockpiles at Cushing, Oklahoma, the delivery point for U.S. crude, gained 720, 000 barrels to 23.24 million.
Light, sweet crude for January delivery moved up 66 cents to settle at 76.51 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for January delivery gained 1.03 dollars to close at 80.36 dollars a barrel.