Oil prices rallied on Thursday after falling 1 percent in the previous session as fears of a tight winter supply eclipsed fears of a global recession.
Brent crude futures were up 50 cents, or 0.6%, at $90.33 a barrel by 0319 GMT, paring losses in early Asian trade. U.S. West Texas Intermediate (WTI) crude was up 45 cents at $83.39.
Both benchmarks fell to near two-week lows on Wednesday after the U.S. Federal Reserve raised interest rates by 75 basis points for a third time to tame inflation and signaled that borrowing could be cut this year. Costs will continue to rise.
Analysts at Hetong Futures said the market had priced in expectations of a rate hike and the Fed’s announcement did not come as much of a surprise.
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, escalating the conflict and raising the risk of a geopolitical standoff.
Meanwhile, some Chinese refineries are considering extending runs in October, amid strong demand and a possible reversal of Beijing’s fuel export policy, which could boost crude demand.
But oil prices remain under selling pressure due to building inventory stocks and a deteriorating economic outlook, Citi analysts said in a note.
U.S. crude inventories (USOILC=ECI) rose 1.1 million barrels in the week to 430.8 million barrels on Sept. 16, falling short of analysts’ expectations for a 2.2 million barrel increase in a Reuters poll.
A stronger dollar also curbed oil price gains as it made crude more expensive for many buyers. The dollar index hit a 20-year high against other currencies on Wednesday.
Elsewhere, Germany on Wednesday nationalized gas importer Uniper ( UN01.DE ) and Britain said it would halve energy bills for businesses in response to a deepening supply crisis that has has exposed Europe’s dependence on Russian fuel.
