Oil futures stabilized on Friday after data showed a drop in U.S. crude and fuel inventories and the emergence of new fiscal stimulus measures to boost the Chinese economy, although prices were heading for their biggest weekly loss in over a month.

Brent crude oil futures gained 23 cents, or 0.3%, to $74.68 per barrel at 08:40 GMT, while American West Texas Intermediate crude oil was at $70.96 per barrel, up 29 cents, or 0.4%.

Brent and WTI are expected to fall by around 6% this week, their biggest weekly drop since September 2, after OPEC and the International Energy Agency cut their forecasts for global oil demand in 2024 and 2025.

Fears have also subsided that a possible retaliatory attack by Israel against Iran could disrupt Tehran's oil exports.

“Positive economic data from the United States helped ease some concerns about growth, but market players continue to monitor the potential recovery in demand in China following the recent stimulus measures,” said Hani Abuagla, senior market analyst at XTB MENA.

Retail sales in the United States grew slightly more than expected in September, with investors still counting on a 92% chance of a Federal Reserve rate cut in November.

Elsewhere, figures from the Energy Information Administration (EIA) showed that U.S. crude oil, gasoline, and distillate inventories declined last week.

At the same time, the Chinese central bank has launched two financing programs that will initially inject 800 billion yuan ($112.38 billion) into the stock market through new monetary policy tools.

Production at Chinese refineries also declined for the third month in a row, as low fuel consumption and low refining margins limited processing. However, markets remain concerned about a possible surge in prices due to tensions in the Middle East, with the Lebanese Hezbollah militant group announcing on Friday that it was entering a new phase of escalation in its war against Israel following the assassination of Hamas leader Yahya