Oil prices climb as weaker dollar boosts appetite for risky assets
Oil rebounded on Thursday after falling in the previous session as a weaker dollar brought back some appetite for risky assets and OPEC+'s decision to renew production cuts eased oversupply concerns.
Brent crude futures rose 65 cents, or 0.8%, at 0353 GMT to $83.49 a barrel, while West Texas Intermediate (WTI) crude futures advanced 71 cents, or 0.9%, to $77.12 a barrel.
Both indicators fell more than 3% overnight after US government data showed large increases in inventories of crude oil and petroleum products.
The Federal Reserve raised its target rate by a quarter point on Wednesday, but said it would continue to increase borrowing costs as part of its ongoing fight against inflation.
The Fed's stance showed that progress has been made in the fight against inflation and that it is not worried about easing financial conditions.
"Inflation has decreased somewhat, but remains high," said by the US central bank in a statement, noting the progress made in slowing the pace of price increases from the 40-year highs it saw last year.
The US dollar index fell to a nine-month low on Thursday in response to weak rate hikes. A weaker dollar makes dollar-priced oil cheaper for holders of other currencies, increasing demand.
The OPEC+ panel, at its meeting Wednesday, affirmed the oil-producing group's current production policy, keeping production cuts agreed on last year amid hopes for increased demand in China and uncertain prospects for Russian supply.
To support the market, OPEC+ had agreed to lower its production target by 2 million barrels per day (bpd) from November last year to the end of 2023, about 2% of world demand.
Prices are also increasing due to the ban imposed by the European Union on Russian refined products on February 5.
The European Commission proposed last week that the EU impose a price cap of US$100 per barrel on premium Russian petroleum products such as diesel and US$45 per barrel on discounted products such as fuel oil from February 5.
The European Commission, which could not reach a decision on Wednesday due to differences of opinion between the countries, will try its luck again on Friday for a proposal to set a ceiling price for Russian oil products.
Related Articles
Oil prices are rising as supply concerns increase amid expectations of a prolonged conflict in the Middle East
Oil prices continued to rise following US and Iranian attacks on ships serving their respective purposes
Oil prices closed higher this week following renewed US-Iran hostilities
