Oil rose more than $1 a barrel on Thursday and broadened gains from the previous session as risk appetite among investors increased, while lower crude inventories and a recovery in US gasoline demand supported prices.
Brent crude futures for September rose $1.20, or 1.1%, to $107.82 a barrel as of 0158 GMT, after gaining $2.22 on Wednesday.
West Texas Intermediate crude (WTI) was up $1.44, or 1.5%, to $98.70 a barrel after rising $2.28 in the previous session.
The U.S. Federal Reserve raised the overnight benchmark rate by three-quarters to cool inflation, while the dollar fell in hopes of a slower march.
Risk sentiment has been spared recession fears amid continued US earnings optimism and a less aggressive rate hike rhetoric by the Fed supporting the crude oil market rally. The weakening US dollar also pushed up commodity prices.
A weaker dollar makes oil priced in dollars cheaper for buyers in other countries to purchase.
According to data from the Energy Information Administration (EIA), US crude oil inventories fell by 4.5 million barrels last week against expectations for a decrease of 1 million barrels, while US gasoline demand rose 8.5% week on week.
The USA consolidated its position as the world’s largest oil exporter with a record 10.9 million barrels of crude oil and refined product exports per day. Crude oil exports are at a record 4.6 million barrels per day. Exports are on the rise as WTI is trading against Brent at a large discount, making US crude purchases more attractive to foreign buyers.
Prices also found support as the wealthiest Group of Seven Economies aims to have a price cap mechanism on Russian oil exports by December 5, a senior G7 official said on Wednesday.
The growth of U.S. crude oil production may be limited by capital constraints, as well as the availability of technical equipment and crews, executives said this week.
Meanwhile, Russia has reduced its gas supply to only 20% of capacity via Nord Stream 1, its main gas link to Europe. Analysts said this could lead to a switch from gas to crude and support oil prices in the short term.
