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Oil prices rise as supply concerns deepen

Looking ahead, crude prices can remain subdued, tracking the strength of the dollar which continued to move higher after the Fed hike rates aggressively and promised more rate hikes for a longer period of time. (File Photo: Bloomberg)Premium
Looking ahead, crude prices can remain subdued, tracking the strength of the dollar which continued to move higher after the Fed hike rates aggressively and promised more rate hikes for a longer period of time. (File Photo: Bloomberg)

Oil had slumped in the previous session to hit near two-week lows after the US Federal Reserve raised interest rates by 75 basis points, for the third time in a row, to tame inflation and signalled that more hikes are in the offing

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NEW DELHI: Global crude oil prices bounced back on Thursday, having declined 1% in the previous session, as the market worried about tight supplies.

At around 1150am, Brent crude futures 0.80% to $90.55 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 0.78% to $83.59.

The benchmarks had slumped in the previous session to hit near two-week lows after the US Federal Reserve raised interest rates by 75 basis points, for the third time in a row, to tame inflation and signalled that more hikes are in the offing.

Analysts said the market had largely priced in the rate hike.

Sriram Iyer, senior research analyst at Reliance Securities, said prices are supported by concerns of a Russian troop mobilisation, after Russian President Vladimir Putin called up 300,000 reservists to fight in Ukraine and backed a plan to annex parts of the country, hinting that he was prepared to use nuclear weapons.

However, data from the US EIA showing that US gasoline demand over the past four weeks fell to 8.5 million barrels per day, the lowest since February, may weigh on prices. It also reported a 1.1 million barrel increase in crude stocks, while distillate and gasoline stockpiles rose by 1.2 million barrels and 1.6 million barrels respectively last week.

“Looking ahead, crude prices can remain subdued, tracking the strength of the dollar which continued to move higher after the Fed hike rates aggressively and promised more rate hikes for a longer period of time," Iyer said.

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