Oil prices rose on Thursday. Prices continued to rally more than 3% in the previous session, supported by record-high US crude exports and a weak US dollar, but gains were capped in Asia by lingering fears over sluggish demand in China.
Brent crude futures rose 20 cents, or 0.2%, to $95.89 a barrel as of 0332 GMT. West Texas Intermediate (WTI) crude rose 19 cents, or 0.2%, to $88.10 a barrel.
U.S. crude inventories rose 2.6 million barrels last week and crude oil exports rose to the highest level ever at 5.1 million barrels per day, according to official weekly data on Wednesday.
Strong US crude exports have boosted optimism over demand and stimulated new purchases, but there are concerns over China’s mixed economic policies.
Global investors slashed Chinese holdings earlier this week on fears that the current ideology could increasingly eclipse growth under President Xi Jinping, China’s strongest leader since Mao Zedong.
The World Bank said on Wednesday it expects energy prices to fall 11% in 2023, following a 60% increase this year following Russia’s invasion of Ukraine, but slower global growth and COVID restrictions in China could lead to a deeper decline.
The dollar slid on Thursday amid rising market expectations that the Federal Reserve will soften its aggressive stance on rate hikes.
The weakness of the dollar adds support to prices, as the recent strength of the dollar has been a major factor holding back oil market gains. A weaker dollar makes dollar-denominated crude oil cheaper for holders of other currencies.
US and Western officials are finalizing plans to cap Russian oil prices after a warning from the World Bank that any plan would need active participation from emerging market economies to be effective.
Officials said that a price range has not been decided yet. But it is talked that the upper limit will be determined based on the historical average of $63-64 per barrel.
