Oil rises as supply fears outweigh recession concerns
Oil rebounded on Thursday after falling 1% in the previous session as fears of tight supplies heading into winter overshadowed fears of a global recession.
Brent crude futures rose 15 cents, or 0.2%, to $89.98 a barrel as of 0657 GMT, recouping their losses in early Asia trade. West Texas Intermediate (WTI) crude rose 10 cents to $83.04.
Both gauges fell to a two-week low on Wednesday after the Federal Reserve raised interest rates by 75 basis points for the third time to curb inflation and signaled that borrowing costs will continue to rise this year.
As expected, the Fed made its third 75 basis point hike yesterday. Markets welcomed the decision as a 75-basis point increase was better than a 100-basis point increase. Some analysts said the fact that the rate hike wasn't any bigger gave oil markets some relief.
Meanwhile, Russian President Vladimir Putin's move to call 300,000 reservists, pointing to the escalation of the war in Ukraine, raised concerns that supply could be adversely affected. In addition, oil prices are under selling pressure due to inventory increases and the worsening economic outlook.
Some Chinese refineries are focused on stronger demand and fuel export policies that could boost Beijing's crude oil demand.
U.S. crude inventories increased by 1.1 million barrels to 430.8 million barrels in the week of September 16, beating analysts' expectations for an increase of 2.2 million barrels.
The rising dollar has also limited increases in oil prices as it makes crude oil more expensive for many buyers. The dollar index hit a 20-year high against a basket of other currencies on Wednesday.
Germany nationalized gas importer Uniper on Wednesday, and Britain said it would cut energy bills for businesses in half in response to the deep supply crisis that has exposed Europe's reliance on Russian fuel.
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