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The Equinor ASA offshore oil drilling platform on Johan Sverdrup oil field in the North Sea off the coast of Norway.
Carina Johansen | Bloomberg | Getty Images
Oil prices rose on Thursday, extending the previous session’s gains, on a bigger-than-expected weekly withdrawal from U.S. crude storage and a weaker dollar after the U.S. central bank signaled lower borrowing costs for 2024.
Brent futures was up $1.45, or 1.95%, to $75.70 a barrel. U.S. West Texas Intermediate (WTI) crude climbed $1.30, or 1.9%, to $70.77.
“Crude oil prices rebounded before the Fed meeting, and the event lifted them further,” said CMC Markets analyst Tina Teng in a client note.
The dollar dropped to a fresh four-month low on Thursday after the U.S. Federal Reserve’s latest economic projections indicated the interest rate hike cycle has ended and lower borrowing costs were coming in 2024.
Fed Chair Jerome Powell said on Wednesday the historic tightening of monetary policy was likely over.
Lower interest rates reduce consumer borrowing costs, which can boost economic growth and demand for oil. A weaker dollar makes oil less expensive for foreign purchasers.
Prices were also boosted by a larger-than-expected draw from the U.S. crude inventory, Teng added.
The U.S. Energy Information Administration (EIA) said energy firms withdrew a bigger-than-expected 4.3 million barrels of crude from stockpiles in the week ended Dec. 8 as imports fell.
Brent futures are down about 10% since OPEC+ announced plans for a new round of production cuts on Nov. 30. OPEC+ includes OPEC and allies such as Russia.
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