NEW YORK: Oil prices jumped more than 2 percent on Thursday but then pared gains as a much sharper rise than expected in US inventories partially offset Russian supply curbs.
Brent crude futures rose 96 cents, or 1.2%, to $81.56 a barrel by 11:34 a.m. EST (1434 GMT), compared with about $98 a barrel on the eve of Russia’s invasion of Ukraine a year ago.
West Texas Intermediate crude futures (WTI) advanced 91 cents, or 1.2%, to $74.86 after six sessions of losses. Earlier, the US benchmark rose by more than $2.
US crude oil inventories rose by 7.6 million barrels in the week to Feb. 17, the US Energy Information Administration said, more than triple analyst expectations for a 2.1 million-barrel rise.
US oil inventories have climbed every week since mid-December, stoking worries about demand.
“With respect to pressure coming from the Federal Reserve on demand and warming weather in the US and Europe there is overall concern about the demand side,” said Tony Headrick, energy market analyst at CHS Hedging.
Prices got an early boost from Russia’s plans to cut oil exports from its western ports by up to 25% in March, exceeding its announced production cuts of 500,000 barrels per day.
Both oil benchmarks lost more than $2 in the previous session on expectations of further interest rate hikes.
Minutes from the latest US Federal Reserve meeting on Wednesday showed a majority of Fed officials agreed the risks of high inflation warranted further rate hikes.
The dollar has strengthened in recent weeks, making oil more expensive for holders of other currencies.
While a stronger dollar remains a near-term headwind for crude, UBS analysts said they expect lower Russian production and China’s reopening to tighten the oil market and support prices.
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