Price Increase Details
Brent crude increased by $1.26, or 1.5%, to $82.85 per barrel by 1:05 p.M. ET. U.S. West Texas Intermediate crude increased by $1.13, or 1.5%, to $76.86.
Impact of Interest Rate Hikes
Expectations of further interest rate hikes in the U.S. and Europe have impacted the global growth outlook and decreased crude benchmarks this week. However, the U.S. Federal Reserve may have less reason to raise interest rates as much as previously thought after a recent report indicated a possibility of easing inflation and normalizing the pandemic-disrupted labor market.
Fed Chair Jerome Powell has warned of potentially faster rate hikes, and the central bank's next monetary policy meeting is scheduled for March 21-22. Analysts have noted that a longer period of interest rate hikes by the Fed would weigh on oil prices.
Other Factors Affecting Oil Prices
A strengthening dollar is also making oil more expensive for holders of other currencies. Global shares, which often move in tandem with oil prices, hit a two-month low due to investors dumping banks.
Supply Side Developments
On the supply side, major oil producers Saudi Arabia and Iran re-established ties after previously undisclosed talks in Beijing. The U.S. reportedly urged some commodity traders to ease concerns about shipping price-capped Russian oil to shore up supply.
Investors closely monitor Russia's decision to cut oil output by 500,000 barrels per day in March. U.S. President Joe Biden also proposed a budget on Thursday that would eliminate billions of dollars in oil and gas industry subsidies.