Oil prices rose amid prospects of a less aggressive U.S. rate hike; although worries about a recovery in demand capped gains. Brent crude futures delivery rose $1.25, or 1.3%, to $100.35 a barrel by 0300 GMT; while WTI crude rose 90 cents, or 0.9%, to $96.68 a barrel.
The Fed’s most hawkish policymakers said they favoured another 75-basis-point interest rate increase at the U.S. central bank’s policy meeting this month; not the bigger rate raise that traders had raced to price showed inflation was accelerating. Still, both Brent and WTI had clawed back nearly all losses by the end of the trading session.
Concerns about the outlook for demand continued to keep a lid on oil prices. Renewed COVID-19 outbreaks in China, which threaten to halt the recovery in demand have not helped sentiment. High prices also appear to have blunted demand for gasoline in the U.S.,” ANZ Research analysts said.
However; spare capacity at members of the Organization of the Petroleum Exporting Countries is running low, with most producers pumping at maximum capacity; and it is unclear how much extra Saudi Arabia can bring into the market quickly.