rebounded Oil pricesToday, Thursday, after it fell in the previous session, as the dollar’s weakness restored some appetite for risky assets, while the “OPEC +” decision to continue cutting production helped calm fears of an increase in supply.
And by 03:53 GMT, Brent crude futures rose 65 cents, or 0.8%, to $83.49 a barrel, while US West Texas Intermediate crude futures rose 71 cents, or 0.9%, to $77.12 a barrel, according to WTI. Archyde.com.
Both benchmarks fell by more than 3% last night after data from the US government showed significant increases in inventories of crude and oil products.
The Federal Reserve raised its target interest rate by a quarter of a percentage point on Wednesday, and still promises a “continued increase” in borrowing costs in its unresolved battle against inflation.
“These reaffirmations of monetary tightening from the Federal Reserve were met with growing skepticism from the markets, which sensed a softening note in Jerome Powell’s acknowledgment of progress in the anti-inflation process,” said IG market analyst Yip Jun Rong.
The US central bank said in a statement, acknowledging the progress that has been made in reducing the pace of price increases from the highest levels in 40 years recorded last year, that “inflation has decreased somewhat, but it remains high.”
The dollar index fell to a new nine-month low, today, Thursday, due to bets on easing monetary tightening.
A weaker dollar makes oil priced in the US currency less expensive for holders of other currencies, which boosts demand.
A committee affiliated with “OPEC +” endorsed the current production policy of the group of oil producers during a meeting on Wednesday, leaving the production cuts agreed upon last year in force amid hopes for a rise in Chinese demand and a vague outlook for Russian supplies.
OPEC + agreed to reduce its production target by two million barrels per day, or about 2% of global demand, from November last year until the end of 2023 to support the market.
Oil prices also rose amid an EU ban on Russian refined products that takes effect on February 5.
Diplomats also said that the European Union countries will seek on Friday to agree on the European Commission’s proposal to set a ceiling on the prices of Russian oil products, after a decision was postponed on Wednesday amid divisions among the member states.
Last week, the Commission proposed that the European Union apply from February 5 a price cap of $100 a barrel on Russian oil products sold at a premium such as diesel, and a ceiling of $45 a barrel on products sold at a discount such as fuel oil.