Oil price rises amid dollar retreat, OPEC+ left production plan unchanged

Feb 2 (Reuters) – Crude oil prices rebounded on Thursday after falling in the previous session as the weakening dollar revived appetite for risky assets and OPEC+’s decision to keep its mining policy helped ease oversupply fears.

Brent crude oil futures rose 09:00 Moscow time 0.72% to $83.44 a barrel, WTI 0.84% ​​to $77.05 a barrel.

Both metrics fell more than 3% after US government data showed a significant increase in inventories of crude oil and petroleum products.

The US Federal Reserve raised its key interest rate by a quarter of a percentage point. In addition, the regulator may eventually raise the cost of credit more than the December forecast suggests, the head of the central bank said.

“These confirmations of the hawkish (sentiment) from the Fed were met with growing market doubts that were interpreted as Jerome Powell’s dovish appreciation of progress in the ‘disinflation process’ and (his words about) that he is not worried about weakening financial conditions.” said Yeap Jun Rong of IG in a note.

“Inflation has eased somewhat but remains elevated,” the US central bank said in a statement that explicitly recognized the progress made in easing price increases from last year’s 40-year highs.

The US dollar index hit a nine-month low on Thursday amid expectations of a smaller interest rate hike. A weaker dollar makes oil cheaper for holders of other currencies, increasing demand.

The OPEC+ monitoring committee, which met on Wednesday, backed the group’s current policy, upholding production cuts agreed in November amid hopes of stronger demand from China and uncertain supply prospects from Russia.

Prices are also rising against the background of the EU ban on the supply of Russian petroleum products, which will be introduced on February 5.

EU countries intend to reach an agreement on Friday on the European Commission’s proposal to limit the price of Russian petroleum products. Diplomats said the decision was delayed on Wednesday due to disagreements between the participating countries.

Last week, the European Commission proposed that the EU apply a price cap of $100 per barrel for Russian premium petroleum products such as diesel and $45 per barrel for discounted products such as heating oil from February 5.

The original message in English is available under the code: (Laura Sanicola and Muyu Xu)