ALBAWABA – Oil prices rose further on Thursday to a one-year high, having fallen slightly on Wednesday, despite anticipation of another interest rate hike in the United States (US), news agencies reported.
Contrary to the usual trend, oil prices extended their rally as the US dollar strengthened on speculations of the US Federal Reserve (Fed) hiking interest rates in their next policy meeting.
Expectations of higher demand against waning supplies, as Saudi Arabia and Russia extend their oil cuts until the end of 2023, have also bolstered oil prices, according to Agence France-Presse (AFP).
Brent crude futures climbed $0.78 to $97.33 per barrel barrel after hitting levels not seen since November last year. US West Texas Intermediate crude futures (WTI) were also up $0.85 to $94.53 a barrel by 0649 GMT, as reported by Reuters.
US crude stocks fell by 2.2 million barrels last week to 416.3 million barrels, government data showed, far exceeding the 320,000-barrel drop analysts expected in a Reuters poll.
A stronger US dollar usually means lower oil prices, but in this case, supply concerns and stronger demand expectations outweighed the stronger dollar - Shutterstock
Between the surge late Wednesday and the rally on Thursday, oil prices have hit their highest levels since August 2022.
Stocks at the Cushing, Oklahoma, storage hub, delivery point for US crude futures, fell by 943,000 barrels to less than 22 million barrels, the lowest since July 2022, data showed, Reuters reported. News of US inventories dwindling sparked the rise in oil prices yesterday.
Late on Wednesday, WTI briefly edged above $95 a barrel for the first time in more than a year after jumping 3.6 percent on Wednesday, marking its biggest gain since early May, according to Bloomberg.
Earlier this month, the Organization of Petroleum Exporting Countries (OPEC) forecast a deficit of as much as 3 million barrels a day of crude in the fourth quarter.
With demand in the US and China seemingly resilient, many anticipate oil prices will breach the $100 threshold again, even as the dollar rallies and worries about high global interest rates persist.
