Oil rose more than a dollar a barrel on Thursday, extending gains from the previous session, buoyed by higher risk appetite as a drop in crude inventories and a rebound in gasoline demand in the United States supported prices.
* September Brent crude futures were up $1.65, or 1.55%, at $108.27 a barrel by 1034 GMT, after gaining $2.22 on Wednesday. US West Texas Intermediate (WTI) was up $2.03, or 2.09%, at $99.29 a barrel, after rising $2.28 in the previous session.
* “Yesterday’s stock market rally after the Fed rate hike and subsequent dollar decline helped oil prices regain their footing,” said Tamas Varga, an analyst at PVM Oil Associates. “The weekly EIA statistics were also helpful. There were declines in the main categories and products supplied.”
* The US Federal Reserve raised its benchmark overnight rate by three-quarters of a percentage point, in line with expectations, to cool inflation, with the dollar slipping lower on hopes of a slower upward path. .
* A weaker dollar makes oil, priced in the US currency, cheaper for buyers in other countries.
* Meanwhile, crude oil inventories in the United States fell 4.5 million barrels last week, against expectations of a drop of 1 million barrels, while gasoline demand rebounded 8.5% weekly, according to data from the Energy Information Administration (EIA).
* Prices found further support in the energy supply battle between the West and Russia. The Group of Seven richest economies aims to have a price cap mechanism on Russian oil exports by December 5, a senior G7 official said on Wednesday.