Oil rose on Thursday as prospects of higher sugar demand and geopolitical risks outweighed fears of a recession after a flurry of central bank interest rate hikes, including the Bank of England.
Brent crude futures were up 70 cents, or 0.78%, at $90.53 a barrel by 1054 GMT, while US West Texas Intermediate (WTI) crude was up 71 cents, or 86%, at $83.65.
Crude oil demand in China, the world’s biggest oil importer, rose more than $1 earlier in the session on news that tighter COVID-19 restrictions eased.
At least three Chinese state oil refineries and one privately-run mega refiner are looking at growth of up to 10% in September to October, driven by strong demand and fuel exports in the fourth quarter, people with knowledge of the matter said. on a potential surge.
Meanwhile, Russia on Thursday pushed forward with its largest military since World War Two, raising concerns that the escalation of the war in Ukraine could cause further damage to supplies.
,[Russian President Vladimir Putin’s] “Often irrational actions and reactions keep the market volatile and violent,” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.
Keeping a cap on prices, the Bank of England raised its key interest rate by 50 basis points to 2.25% and said it would continue to “coercively, necessarily respond” to inflation despite a slowdown in the economy.
Rate hikes from the Swiss National Bank, Norges Bank and Indonesia’s central bank were also thick and sharp, after the Federal Reserve’s massive 75 bps hike on Wednesday, with further hikes expected later in the day from the South African Reserve Bank.
“It shows how synchronized this current hardening cycle is,” Deutsche Bank said.
The Fed also indicated on Wednesday that US borrowing costs will continue to rise this year, a move that sent Brent and WTI to near two-week lows.
Further pressure after stock build. US crude inventories rose 1.1 million barrels in the week to September 16 to 430.8 million barrels, below analysts’ expectations in a Reuters poll for an increase of 2.2 million barrels.
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