Investing.com– Oil prices rose Thursday, rebounding after three consecutive losing sessions, although sentiment remains pressured by persistent concerns over high for longer U.S. interest rates as well as an unexpected build in U.S. inventories.
At 09:10 ET (13:10 GMT), rose 1.1% to $82.77 a barrel, while rose 1.1% to $78.44 a barrel.
Both benchmarks fell more than 1% on Wednesday for their third straight day of losses.
US rate jitters grow after Fed minutes, policymaker comments
The minutes of the Fed’s late-April meeting showed waning confidence among policymakers that inflation was easing as expected, potentially necessitating interest rates remaining at elevated levels for a lengthy period of time.
A string of Fed officials also warned of such a scenario in recent weeks, and that any potential plans for rate cuts will be largely contingent on confidence in inflation coming back within the central bank’s 2% annual target.
Several policymakers also said they were open to raise interest rates further should the need arise, the minutes showed.
The minutes, along with the comments, boosted the dollar on Wednesday, which in turn pressured oil prices.
The prospect of high U.S. rates also spurred persistent concerns that global economic activity will cool substantially in 2024, pressuring oil demand.
US inventories see unexpected build
Fears of sluggish demand and well-supplied markets were furthered by official data on Wednesday showing that U.S. saw an unexpected build in the week to May 17.
also grew, while saw a smaller-than-expected draw.
The reading set a dour tone ahead of the Memorial Day holiday weekend, which usually marks the beginning of the travel-heavy summer season, which is expected to boost demand.
OPEC+ meeting in spotlight
On the supply front, markets were awaiting a meeting of the Organization of Petroleum Exporting Countries and allies (OPEC+) in early-June, where the cartel could potentially extend its current run of production cuts.
“The weakness in oil prices increases the likelihood that OPEC+ members fully roll over their additional voluntary supply cuts into the second half of the year,” ING said, in a note.
OPEC+ oil producers are making voluntary output cuts totalling about 2.2 million barrels per day for the first half of 2024, led by Saudi Arabia rolling over an earlier voluntary cut.
These curbs come on top of earlier reductions announced in various steps since late 2022 and bring the total pledged cuts to about 5.86 million barrels per day, equal to just under 6% of daily world demand.
(Ambar Warrick contributed to this article.)