Brent and West Texas Intermediate (WTI) crudes headed for their first weekly gains since September after China, the world’s second-largest oil consumer, cut interest rates to bolster its economy, Bloomberg reported Nov. 21.

Futures gained as much as 2.9% in London. The People’s Bank of China cut lending and deposit rates for the first time since 2012, according to a statement on its website. Saudi Arabia and Russia, the two largest crude exporters, agreed to cooperate on oil markets. Half of the 20 analysts surveyed by Bloomberg News predict the OPEC will reduce output, while the rest expect no change when the group meets next week.

“If the expectation that we may get better demand from China follows through, that will definitely support Brent,” Amrita Sen, chief analyst at London-based consultant Energy Aspects Ltd., said by phone. A 1% rise in the country’s gross domestic product expands its oil demand by about 0.7%, she said.

Brent for January settlement increased as much as $2.28 to $81.61 a barrel on the London-based ICE Futures Europe exchange, the highest since Nov. 12. It was at $81.50 as of 12:40 p.m. local time and set for a weekly rise of 2.7%, the first since Sept. 19. The volume of all futures traded was about 30% above the 100-day average for the time of day.

WTI for January delivery climbed as much as $1.98, or 2.6%, to $77.83 a barrel in electronic trading on the New York Mercantile Exchange. The December contract expired yesterday after rising $1 to $75.58. The European benchmark crude traded at a $3.83 premium to WTI, compared with $3.59 on Nov. 14.

China Rates

The People’s Bank of China cut its one-year benchmark lending rate by 0.4 percentage points to 5.6%, while the deposit rate fell 0.25 percentage points to 2.75%, effective from Nov. 22.

“After a lot of recent bearish news we received fairly optimistic news from China,” Myrto Sokou, senior analyst at London-based Sucden Financial Ltd., said by e-mail. “However, I believe we are going to experience high volatility and more downside pressure in the oil market ahead of the OPEC meeting.”

Saudi Arabia and Russia agreed that the oil market “must be free of attempts to influence it for political and geopolitical reasons,” Russian Foreign Minister Sergei Lavrov told reporters in Moscow today after a meeting with his Saudi counterpart. Oil exporters “have a right to take measures to correct these non-objective factors.”

Saudi Arabia, OPEC’s biggest producer, may be shifting its focus to defend market share, according to Bank of America Corp. The kingdom may prefer lower and more volatile oil prices to discourage investment in North American shale output, it said in a note yesterday, projecting that OPEC may trim its collective target by no more than 500,000 barrels a day (bbl/d).

OPEC, which supplies about 40% of the world’s oil, pumped 30.97 million bbl/d in October, data compiled by Bloomberg show. That exceeded its quota of 30 million a day, first agreed in January 2012, for a fifth straight month.