Oil prices rose more than 1% on Thursday after a large interest rate cut from the U.S. Federal Reserve, helping Brent to recover from below $69 last week - its lowest all year - to above $74.

Brent crude futures were up 90 cents, or 1.2%, to $74.55 a barrel at 1303 GMT, while WTI crude futures for October were up 88 cents, also 1.2%, to $71.79 a barrel. The benchmarks had earlier risen more than $1 each.

The U.S. central bank cut interest rates by half a percentage point on Wednesday. Interest rate cuts typically boost economic activity and energy demand, but the market also saw it as a sign of a weaker U.S. labor market that could slow the economy.

"While the 50 basis point cut hints at harsh economic headwinds ahead, bearish investors were left unsatisfied after the Fed raised the medium-term outlook for rates," ANZ analysts said in a note.

The Bank of England on Thursday held interest rates at 5.0%.

Weak demand from China's slowing economy continued to weigh on oil prices.

Refinery output in China slowed for a fifth month in August, statistics bureau data showed over the weekend. China's industrial output growth also slowed to a five-month low last month, and retail sales and new home prices weakened further.

Markets were also keeping an eye on events in the Middle East after walkie-talkies used by Lebanese armed group Hezbollah exploded on Wednesday following similar explosions of pagers the previous day.

Security sources said Israeli spy agency Mossad was responsible, but Israeli officials did not comment on the attacks.

Citi analysts say they expect a counter-seasonal oil market deficit of around 0.4 million barrels per day (bpd) to support Brent crude prices in the $70 to $75 a barrel range during the next quarter, but that would be temporary.

"As 2025 global oil balances deteriorate in most scenarios, we still anticipate renewed price weakness in 2025 with Brent on a path to $60/barrel," Citi said in a note on Thursday.

(Reporting by Paul Carsten in Nairobi, Colleen Howe in Beijing and Sudarshan Varadhan in Singapore; Editing by Mark Potter, Shri Navaratnam, Alexandra Hudson and Sharon Singleton)