Jul 14, 2022 12:25AM ET
By: AnalysisWatch
Oil prices rose on Thursday, with Brent crude breaking through $100 a barrel as investors weighed tight supplies against the prospect of a big U.S. rate hike that would curb inflation and dampen crude demand.
Brent crude futures for September rose 68 cents, or 0.7%, to $100.25 a barrel by 12:00 AM ET, after settling beneath $100 for a second straight session on Wednesday.
U.S. West Texas Intermediate crude for August delivery was at $96.85 a barrel, rose 55 cents, or 0.6%, after climbing 46 cents in the previous session.
Oil prices have fallen in the past two weeks on recession concerns, although exports of crude and refined products from Russia have declined in the wake of Western sanctions and the supply disruption in Libya.
The Federal Reserve is expected to raise interest rates by 100 basis points this month in response to a gloomy inflation report that showed an acceleration in price pressures.
The Fed's rate hike is expected to follow a similar surprise move by the Bank of Canada on Wednesday.
Investors also flocked to the dollar, often seen as a safe haven. The dollar index hit a 20-year high on Wednesday, making oil purchases more expensive for non-U.S. buyers.
Fears about COVID-19 lockdowns in several Chinese cities to contain new cases of a highly infectious sub-variant have also depressed oil prices.
However, spare capacity in the Organization of Petroleum Exporting Countries is running low as most producers pump at maximum capacity, and it is questionable how much additional oil Saudi Arabia can quickly bring to market.
U.S. Energy Information Administration data also points to slowing demand, with product supply falling to 18.7 million barrels per day, the lowest level since June 2021. Crude oil inventories rose, supported by another large draw from strategic reserves
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