LONDON—Oil prices rose on Friday amid prospects of a less aggressive U.S. rate hike, although worries about a recovery in demand capped gains.
Brent crude futures for September delivery rose 76 cents, or 0.77 percent, to $99.86 a barrel by 0929 GMT while WTI crude rose 28 cents, or 0.29 percent, to $96.06.
The U.S. Federal Reserve’s most hawkish policymakers on Thursday said they favored a rate increase of 75 basis points at its policy meeting this month, not the bigger increase traders had priced in after a report on Wednesday showed inflation was accelerating.
The interest rate uncertainty and weak economic data led to Brent and WTI shedding more than $5 on Thursday to less than the closing price on Feb. 23, the day before Russia invaded Ukraine, though both contracts clawed back nearly all the losses by the end of the session.
President Joe Biden, meanwhile, is visiting Saudi Arabia to attend a summit of Gulf allies and is expected to call for the region to pump more oil.
“[Biden’s] case will have been weakened significantly by the latest price rout,” said Stephen Brennock of oil broker PVM.
Analysts, meanwhile, expect continued pressure on oil from concerns over the global economy.
“Brent has dipped noticeably below $100 per barrel this week. It is likely to continue sliding given that the recession fears will presumably not abate for the time being,” Commerzbank said in a note.
Bearish market sentiment has also followed renewed COVID-19 outbreaks in China, which have hampered a demand recovery.
China’s refinery throughput in June shrank nearly 10 percent from a year earlier, with output for the first half of the year down 6 percent in the first annual decline for the period since at least 2011, data showed on Friday.
