Oil edged up on Thursday after Brent crude posted its biggest single-day loss in seven weeks the day before, as market players reassess positions after the U.S. Federal Reserve stoked worries about the economy by suggesting further rate hikes ahead.
West Texas Intermediate crude futures (WTI) advanced $1.15, or 1.56%, to $74.91 a barrel.
Both benchmarks lost more than $2 in the previous trading day on expectations of more aggressive interest rate increases.
Minutes from the latest U.S. Federal Reserve meeting on Wednesday showed that a majority of Fed officials agreed the risks of high inflation remained a key factor shaping monetary policy and warranted continued rate hikes until it was controlled.
The policymakers also suggested that a shift to smaller hikes would let them calibrate more closely with incoming data.
Investors are recalibrating the energy market, weighing the prospects for China’s reviving demand and tepid consumption in the U.S. and other advanced economies, analysts from Haitong Futures said.
Lending some support to oil prices, Russia plans to cut oil exports from its western ports by up to 25% in March versus February, exceeding its announced production cuts of 500,000 barrels per day.
The dollar index inched down by 0.1% to 104.39 on Thursday, making oil slightly cheaper for those holding other currencies.
But oil’s price gains were limited by signs of further crude inventory builds.
U.S. crude oil and fuel inventories rose by 9.9 million barrels last week, according to market sources citing American Petroleum Institute figures on Wednesday.
U.S. oil inventories have climbed every week since mid-December, stoking investor worries about demand.
A Reuters poll had forecast a 2.1 million barrel increase in crude stockpiles last week. Official data from the U.S. Energy Information Administration is due on Thursday at 1600 GMT.