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Brent crude futures rose $1.28, or 1.51%, to $85.91 a barrel by
0944 GMT, while U.S. West Texas Intermediate crude futures
gained $1.33, or 1.65%, to $81.77 a barrel.
Oil prices drew support from the Fed's decision to keep its
benchmark interest rate unchanged at 5.25%-5.50% at its meeting
on Wednesday.
Policymakers struggled to determine whether financial conditions
may be tight enough already to control inflation, or whether an
economy that continues to outperform expectations may need still
more restraint.
U.S. inflation held at 3.4% in September for the third
consecutive month.
"There is still some way to go to achieve the 2% target,
nonetheless monetary tightening has been working effectively and
additional rate increase would probably do more harm than good,"
Tamas Varga, analyst at broker PVM, said.
Meanwhile in Europe, a contraction in manufacturing activity in
the euro zone deepened in October, with Purchasing Managers'
Index (PMI) falling by 0.3 points on the month to 43.1. A score
of below 50 signals contraction.
A Bank of England meeting later on Thursday is expected to
result in interest rates being held steady.
Investors will also be watching for developments in the Middle
East, which has kept oil markets on edge as a wider conflict
could disrupt oil supplies around the region.
Fighting raged on around Gaza City on Thursday as advancing
Israeli tanks and troops encountered fierce resistance from
Hamas militants.
(Reporting by Robert Harvey, Stephanie Kelly and Muyu Xu;
editing by Robert Birsel)
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