09:12 AM EDT, 09/19/2024 (MT Newswires) -- Oil prices rose early on Thursday as investors moved to add risk following U.S. interest-rate cuts as a report showed American oil inventories fell last week while Middle East tensions are on the rise.

West Texas Intermediate crude oil for October delivery was last seen up US$0.84 to US$71.75 per barrel, while November Brent crude, the global benchmark, was up US$0.93 to US$74.58.

The Federal Reserve's policy committee on Wednesday made its first cut to interest rates in four years, cutting its policy rate by 50 basis points, while signaling it is likely to lower rates by another 50 points by year end, a slower pace than some expected.

"The Fed's rate cut cycle has now started and the speed of descent will now depend on incoming data on the US economy," Saxo Bank noted.

In its weekly survey, the Energy Information Administration on Wednesday reported U.S. oil inventories fell a more than expected 1.6-million barrels last week, a sign demand remains solid as the autumn shoulder season begins.

Rising tension in the Middle East is also supporting prices as booby-trapped pagers and walkie-talkies used by the Iran-backed Hezbollah militant group exploded, resulting in deaths and thousands of injuries. Hezbollah blamed the attack on Israel, which has not claimed responsibility, as the two sides trade continue attacks across the Israel-Lebanon border.