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At
an OPEC+ meeting on Sunday, Saudi Arabia said it will cut its
crude output by 1 million barrels per day (bpd) in July on top
of a broader deal to limit supply into 2024 as the producer
group seeks to boost flagging prices.
Brent crude rose 56 cents, or 0.7%, to $77.51 a barrel by 1035
GMT. U.S. West Texas Intermediate crude gained 70 cents, or 1%,
to $73.23.
"With the OPEC+ meeting out of the way, focus is now shifting
towards the next move the Fed will make when it meets next
week," said Tamas Varga of oil broker PVM.
There is growing consensus that the central bank will skip a
rate hike, which could lift oil prices even before falling
supply starts draining global oil inventories, Varga added.
Economists polled by Reuters expect that the U.S. Federal
Reserve will not raise interest rates at its June 13-14 meeting.
But a significant minority expects at least one more increase
this year.
Still, a surprise rate increase in Canada gave investors their
second reminder of the week that the surge in global interest
rates is not done yet.
"Oil prices have been attempting to recover lately," said IG
market strategist Yeap Jun Rong. "But it has been a struggle."
The U.S dollar was slightly weaker on Thursday, making oil
cheaper for buyers holding other currencies.
Both oil benchmarks settled up about 1% on Wednesday, supported
by the Saudi plan, though gains remained capped by rising U.S.
fuel stocks and weak Chinese economic data.
A larger than expected rise in U.S. gasoline inventories raised
concern over demand while U.S. crude stockpiles registered a
small decline of 451,000 barrels.
(Reporting by Alex Lawler; additional reporting by Jeslyn Lerh;
editing by David Goodman and Jason Neely)
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