Oil prices climbed 1% on Thursday, recouping losses from the previous session, as supply tightness and expectations of stronger Chinese demand overrode concerns about an economic slowdown.
Brent crude futures advanced 58 cents, to $83.50 barrel, while U.S. West Texas Intermediate (WTI) crude rose to 0.8%, heading towards their highest since April 19.
Oil prices declined on Wednesday after data showed U.S. crude inventories fell less than expected and the Federal Reserve raised interest rates by a quarter of a percentage point, leaving the door open to another hike.
As the Fed’s move was well expected, the market focus is turning to the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, which holds its monthly Joint Ministerial Monitoring Committee meeting next week.
The committee’s outlook for demand will be key to whether de facto leader Saudi Arabia decides to extend its voluntary output cut of 1 million barrels per day (bpd) into September.
Saudi Arabia trimmed its output to 9 million bpd in July from around 10 million bpd, its biggest output reduction in years, and in early July said it would extend the cut to August.
Meanwhile, market sentiment remains buoyed by China’s vows earlier this week to take more steps to boost growth.
But capping the oil gains, the European Central Bank is expected to raise interest rates for the ninth time in a row on Thursday, which may not be the end to the policy tightening amid persistent inflation.
Russia will significantly increase oil loadings in September, bringing to an end steep export cuts in June through August, as peak refinery maintenance will free up more crude for sales outside the country, three industry sources said and Reuters calculations based on refining data showed.
