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Brent crude futures climbed 11 cents, or 0.1%, to $83.40 per
barrel by 1103 GMT. U.S. West Texas Intermediate (WTI) crude
futures eased 9 cents, or 0.1%, to $77.49 a barrel.
Both Brent and WTI fell by more than 3% on Tuesday after
comments by U.S. Federal Reserve Chair Jerome Powell that the
central bank would likely need to raise interest rates more than
expected in response to recent strong data.
"Fed Chair Powell's comments on 'higher for longer' rates
spooked markets and sent risk assets, including commodities,
sharply down overnight," said Tina Teng, an analyst at CMC
Markets.
A stronger dollar also capped a lid on oil prices. Powell's
comments had propelled the U.S. dollar, which typically trades
inversely with oil, to hit a three-month high against a basket
of currencies.
Barclays lowered its 2023 Brent forecast by $6 to $92 a barrel
and WTI by $7 to $87, "due primarily to more
resilient-than-expected Russian supplies," the bank said.
"[We] expect the continued recovery in civil aviation demand in
China and neighboring countries, a stabilisation in industrial
activity and slower non-OPEC+ supply growth to drive the oil
market balance into a deficit later this year," the bank added.
Traders were also awaiting crude inventory data from the U.S.
Energy Information Administration later on Wednesday, after the
API data showed a decline in crude inventories for the first
time after a 10-week build, she said.
Data from the American Petroleum Institute showed U.S. crude
inventories fell by about 3.8 million barrels in the week ended
March 3, according to market sources.
The drawdown defied forecasts for a 400,000 barrel rise in crude
stocks from nine analysts polled by Reuters.
Meanwhile, gasoline inventories rose by about 1.8 million
barrels, while distillate stocks rose by about 1.9 million
barrels, according to the sources.
(Additional reporting by Jeslyn Lerh in Singapore; editing by
Jason Neely)
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