London: Oil held steady on Friday, on track for a weekly gain, as a market outlook tightened by higher Chinese demand and supply cuts by major producers was balanced by an expected slowdown in the global economy with the possibility of additional interest rate hikes, according to Reuters.

Next week, the Bank of England will increase interest rates by a quarter of a percentage point. 

The US Federal Reserve indicated at least a half-percentage point increase by year's end, and the European Central Bank increased rates to a 22-year high on Thursday.

Also Read: Haftar wants a single government to oversee elections in Libya

"OPEC's (the Organisation of the Petroleum Exporting Countries) focus on supply management will likely enforce the view of a soft floor under the market, currently around $72 in Brent, while an upside break seems equally unlikely as long as the focus remains on a weakening economic outlook," said Ole Hansen, head of commodity strategy at Saxo Bank.

By 1:07 p.m. Saudi Arabian time, Brent crude had increased by 4 cents to $75.71 per barrel, while US West Texas Intermediate crude had also increased by 4 cents to $70.66.

Also Read: Iranian and Afghan border tension raises the possibility of a wider conflict

Increased interest rates may impede economic expansion and lower oil demand. However, following declines in the previous two weeks, both oil benchmarks were poised for a modest weekly gain.

On Thursday, the price of oil increased by about 3% in anticipation of rising Chinese demand. China's refinery throughput increased in May to its second-highest total ever, and the CEO of Kuwait Petroleum Corp. anticipates continued growth in Chinese demand throughout the second half.

Also Read: Rising Heatwaves in India: Doctors Urge Safety Measures for Senior Citizens Above 60

The OPEC+ voluntary crude output cuts, which were started in May and included an additional cut by Saudi Arabia in July, will reduce supply as Chinese demand grows.

A weaker dollar, which on Thursday hit a one-month low against a basket of currencies, also helped to support the price of oil. Demand may increase as oil becomes more affordable to buyers using other currencies due to a weaker dollar