Oil prices were little changed on Thursday as traders weighed the start of looser monetary policy after the US Federal Reserve cut interest rates amid concerns about the US economy.

Brent crude futures rose 23 cents, or 0.3%, to $68.18 a barrel at 10:50 a.m. EDT (14:50 GMT), while US West Texas Intermediate (WTI) crude rose 23 cents, or 0.4%, to $64.28.

The Fed cut its benchmark interest rate by a quarter of a percentage point on Wednesday and indicated it would continue lowering borrowing costs for the rest of the year, responding to signs of weakness in the labor market.

Lower borrowing costs typically increase oil demand and push prices higher. Kuwaiti Oil Minister Tariq Al-Roumi said he anticipated increased oil demand following the recent US interest rate cuts, with particular gains expected in Asian markets. Kuwait is a member of the Organization of the Petroleum Exporting Countries (OPEC).

In Qatar, another OPEC member, state-owned QatarEnergy, raised the price of its al-Shaheen crude oil in November to an eight-month high. However, some analysts are more skeptical about its positive impact on oil prices. "They're doing this now because it's clear the economy is slowing," said Jorge Montepeque, managing director at Onyx Capital Group. "The Federal Reserve is trying to restore growth."

The number of Americans filing new applications for unemployment benefits fell last week, reversing the previous week's surge, but the labor market has weakened as both labor demand and supply have declined.

U.S. single-family homebuilding plunged to a nearly 2.5-year low in August amid an oversupply of unsold new homes, suggesting the housing market could remain a drag on the economy this quarter.

Persistent oversupply and weak fuel demand in the U.S., the world's largest oil consumer, also weighed on the market.

U.S. crude oil inventories fell sharply last week as net imports fell to a record low while exports surged to a nearly two-year high, data from the Energy Information Administration showed on Wednesday. However, the 4 million-barrel increase in distillate stocks, which defied market expectations of a 1 million-barrel increase, raised concerns about demand in the world's largest oil consumer and weighed on prices.

In Russia, the world's second-largest crude oil producer by 2024 after the U.S., the Finance Ministry announced new measures to protect the state budget from oil price fluctuations and Western sanctions targeting Russian energy exports. Elsewhere in Russia, Ukraine said its drones attacked a major oil processing and petrochemical complex and a refinery in Russia, as part of an intensified campaign to disrupt Moscow's oil and gas sector.

Exxon Mobil CEO Darren Woods told the Financial Times in an interview that the U.S. oil major has no plans to resume operations in Russia. Meanwhile, in Germany, Europe's largest economy, parliament approved the country's first annual budget since sweeping reforms to loosen fiscal rules were passed earlier this year, securing record investment to revive the economy while committing to increasing defense spending.

In the Middle East, Israel said its military would attack Hezbollah's military infrastructure in southern Lebanon "in response to its attempts to re-establish its activities in the region." (alg)

Source: Reuters