(Bloomberg) — Oil rose after falling almost 5% over the prior two sessions as investors weighed the outlook for supply and demand following a big interest-rate hike from the Federal Reserve and rising US crude output.
West Texas Intermediate futures climbed above $116 a barrel in early Asian trading on Thursday. The Fed raised interest rates by 75 basis points as the central bank seeks to combat surging inflation. US crude production rose to 12 million barrels a day last week, the first time at that level since early 2020, according to data from the Energy Information Administration.
Crude is up more than 50% this year following a tightening of markets as an economic rebound coincided with upended trade flows after Russia’s invasion of Ukraine. Global oil supply will struggle to meed rising demand in 2023, the International Energy Agency said in a monthly report on Wednesday.
US crude inventories expanded for a second week, while supplies at the key storage hub at Cushing dropped, according to the EIA. Gasoline demand dipped last week but still remains above 9 million barrels a day.
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