Oil prices rose on Thursday as investors focused on expectations of tighter supplies from top oil producers, helping reverse earlier losses that were driven by worries that the hike in interest rates by the U.S. will hurt demand. The promise of economic stimulus in China, the world’s second-biggest oil consumer, also lent support to the market.
Brent crude futures were up 36 cents, or 0.4%, at $83.28 barrel by 0101 GMT, while U.S. West Texas Intermediate (WTI) crude rose to $79.26, up 48 cents, or 0.6%. Oil prices edged lower on Wednesday after data showed U.S. crude inventories fell less than expected and the Federal Reserve raised interest rates by a quarter of a percentage point, leaving the door open to another hike.
Oil prices have rallied for four weeks, buoyed by signs of tighter supplies, largely linked to output cuts by Saudi Arabia and Russia, as well as Chinese authorities’ pledges to shore up the world’s second-biggest economy.
“We expect Brent oil futures will rise to $85 per barrel by the fourth quarter on expectations that OPEC+ supply cuts and resilient demand will force global oil stockpiles to fall,” Commonwealth Bank of Australia said in a note.