Oil rebounded on Thursday after sliding 1% in the previous session as concerns over tight supplies heading into winter eclipsed fears of a global recession.
Brent crude futures rose 50 US cents, or 0.6%, to $90.33 a barrel by 3.19am GMT, recouping their losses in early Asia trade. US West Texas Intermediate (WTI) crude rose 45c to $83.39.
Both benchmarks fell to a near two-week low on Wednesday after the US Federal Reserve raised interest rates by 75 basis points for the third time to tame inflation and signalled that borrowing costs would keep rising in 2022.
The market had priced in a rate hike and the announcement from the Fed did not generate much surprise, said analysts from Haitong Futures.
Russian President Vladimir Putin on Wednesday called up 300,000 reservists to fight in Ukraine and backed a plan to annex parts of the country, which escalated the conflict and intensified the risk of geopolitical runaway, they said.
Meanwhile, some Chinese refineries are considering increasing runs in October, eyeing stronger demand and a potential reversal of Beijing’s fuel export policy, which could boost crude oil demand.
But oil prices remain under selling pressure due to inventory stock builds and a worsening economic outlook, said Citi analysts in a note.
US crude inventories rose by 1.1-million barrels in the week to September 16 to 430.8-million barrels, smaller than analysts’ expectations in a Reuters poll for a 2.2-million-barrel rise.
The soaring dollar also put a lid on oil price gains as it is making crude more expensive for many buyers. The dollar index touched a 20-year high against a basket of other currencies on Wednesday.
Elsewhere, Germany nationalised gas importer Uniper on Wednesday and Britain said it would halve energy bills for businesses in response to a deepening supply crisis that has exposed Europe’s reliance on Russian fuel.