Oil rose 1 percent on Thursday, ending its three-day decline, as risk appetite returned to financial markets after the US Federal Reserve left benchmark interest rates unchanged.
Brent crude futures were up 82 cents, or 1%, to $85.45 a barrel by 0657 GMT, while West Texas Intermediate (WTI) crude futures were also up 1%, or 83 cents, to $81.27 a barrel.
Both indicators fell to multi-week lows in the previous session.
The rise in oil came along with gains in financial assets after the Fed left its benchmark interest rate unchanged at 5.25%-5.50% at its last meeting on Wednesday.
Policymakers have struggled to determine whether financial conditions are already tight enough to contain inflation or whether an economy that continues to perform above expectations will need further restrictions.
The Fed is likely to keep interest rates steady once again in December or keep the door open for further rate hikes if necessary. This could potentially stabilize the risk aversion experienced over the last few months.
Investors are also monitoring developments in the Middle East. Investors are on edge as a wider conflict disrupts oil supplies in the region.
According to news, Iran’s Supreme Leader Ayatollah Ali Khamenei called on Muslim states to stop oil and food exports to Israel and demanded an end to Israel’s bombardment of the Gaza Strip.
Iran, a member of the Organization of Petroleum Exporting Countries (OPEC), produced approximately 2.5 million barrels of crude oil per day in 2022, according to US energy data.
Market participants are awaiting the Bank of England meeting expected to be held today. According to Eurostat data, October inflation in the Eurozone is at its lowest level in two years. This reinforced the view that the European Central Bank is unlikely to raise interest rates anytime soon.
Some analysts estimate that global oil demand in October averaged 102.1 million barrels per day (bpd); This is about 100,000 barrels below previous estimates for the month.
Data from the U.S. Energy Information Administration (EIA) showed the nation’s crude stocks rose as refineries undergoing seasonal maintenance restarted units more slowly than expected.
However, EIA stated that despite lower refining efforts, US gasoline stocks increased by 0.1 million barrels in the week to 223.5 million barrels.