International benchmark Brent crude traded at $96.94 per barrel at 10.01 a.m. local time (0701 GMT) for a 2.39 per cent increase from the closing price of $94.67 a barrel in the previous trading session.
American benchmark West Texas Intermediate (WTI) traded at $90.50 per barrel at the same time for a 2.64 per cent gain after the previous session closed at $88.17 a barrel.
The US dollar’s decline in value encouraged importers to purchase dollar-indexed crude oil at lower prices, which helped oil prices open the last trading day of the week with gains.
The US dollar index, which includes a basket of currencies like the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, retreated 0.32 per cent at 0648 GMT.
Investor concerns about a tightening supply in advance of impending EU restrictions on Russian oil shipments have also helped to support prices.
“With the deadline for Russian oil bans approaching fast, markets are increasingly focused on supply side issues,” Australia and New Zealand Banking Group (ANZ) Commodity Strategist Daniel Hynes said in an emailed note.
Hynes pointed out that supply tightness will result from the OPEC+ group’s anticipated output decreases following their meeting in September.
“The 2 million bpd reduction agreed to at the meeting is likely to be only half that amount as most producers were already struggling to hit their previous quotas. This should keep supply tight over the coming months,” he said.
However, oil markets came under further recessionary pressure after the US Federal Reserve increased interest rates in line with market expectations.
In an effort to combat record inflation, the Fed increased its benchmark interest rate by 75 basis points on Wednesday. As a result, the federal funds rate target range is now between 3.75 per cent and 4 per cent, which is the highest level since January 2008. – email@example.com