LONDON, Aug 17: Oil prices rebounded on Friday, with Brent crude bouncing back above $70 a barrel in London, helped by the Fed’s monetary policy action on Friday, traders said.

Crude futures also gained from fears that Hurricane Dean could damage energy facilities in the Gulf of Mexico after experts said it would be stronger than initially thought.

The price of Brent North Sea crude for October delivery rose 74 cents to $70.51 per barrel in late London trade.

New York’s main futures contract, light sweet crude for delivery in September, climbed 92 cents to $71.92 per barrel.

Oil prices endured a volatile week, rebounding on Friday after the US central bank moved to avert a credit crisis that traders fear will cause a global economic slowdown.

Worries about the credit crisis had been affecting the oil market this week because any slowdown in economic growth reduces demand for oil.

In a move aimed at boosting banks and enabling them to continue lending normally, the US Federal Reserve on Friday slashed the lending rate it charges commercial banks.

Crude futures were also lifted by fears that Hurricane Dean could damage energy facilities in the Gulf of Mexico.

But some analysts warned that prices could drop again next week in a continuation of volatile trading conditions.

“If by some miracle the damage from Dean is not that bad and the stock market is lousy we could see a big drop in (the crude) price next week,” Alaron trader Phil Flynn said.

It was a roller-coaster of a week for oil prices, with them falling steeply on Thursday as hefty declines on world stock markets left traders fretting about potentially risky investments in the commodities markets.

Traders had said that some speculators and investment funds were moving cash into more secure investments and out of riskier holdings, and that some of this movement had dented the oil market.—AFP