Petroleum prices rose for a third straight day on Wednesday as investor concern eased about U.S. interest rate hikes and an industry report pointed to a drop in U.S. crude inventories.
Comments from U.S. Federal Reserve Chair Jerome Powell on Tuesday were seen as less hawkish than feared, boosting risk appetite and weighing on the dollar. A weaker dollar makes oil cheaper for other currency holders.
Brent crude rose 41 cents, or 0.5%, to $84.10 U.S. a barrel. U.S. West Texas Intermediate (WTI) crude climbed 48 cents, or 0.6%, to $77.62.
With less aggressive U.S. rate hikes, the market is hoping the world’s biggest economy can dodge a sharp economic slowdown or even a recession that would hit oil demand, while China’s reopening after ending COVID curbs also bolsters fuel use.
On supply, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, decided last week to keep output curbs in place, and an Iranian official said on Wednesday the group would likely continue its current policy at its next meeting.
Also, the earthquake that struck Turkey and Syria on Monday stopped crude flows from Iraq and Azerbaijan out of the Turkish port of Ceyhan. BP Azerbaijan has declared force majeure on Azeri crude shipments from the port. Iraq’s pipeline to Ceyhan resumed flows on Tuesday.
Adding further support was weekly inventory data from the American Petroleum Institute industry group, which showed crude stocks fell by about 2.2 million barrels in the week ended Feb. 3, according to market sources.
