At 09:00 ET (14:00 GMT), Brent oil futures rose 0.6% at $73.80 a barrel, while West Texas Intermediate crude futures fell 0.1% to $70.50 a barrel.
Stronger dollar post Fed pressures WTI; Brent rises
The dollar shot up to an over two-year high on Wednesday, after the Fed slashed its outlook for rate cuts in 2025.
The central bank now only expects only two 25 basis point cuts in the coming year, compared to prior forecasts of four cuts. The Fed also cut interest rates by 25 basis points, although this move was largely priced in by markets.
The Fed’s outlook sparked a sharp pullback across risk-driven markets, while boosting the dollar.
A stronger dollar pressures oil demand by making the commodity more expensive for international buyers.
However, fears that global economic growth will cool under relatively higher rates, limiting oil demand, were lessened Thursday after the Riksbank, Sweden's central bank, decided to cut its policy rate by 25 basis points to 2.5%.
Norges Bank, Norway's central bank, held its policy interest rate unchanged at a 16-year high of 4.5% on Thursday, as expected, and the Bank of England also stood pat with rates, but three BOE policymakers out of nine voted for a cut, more than had been expected..
Oil sees some support from China hopes, tighter supplies
Crude prices were sitting on some gains this week, especially after signs of more elaborate fiscal stimulus in top oil importer China.
Softening Chinese demand has been a key point of concern for oil markets, as the country grapples with a prolonged economic downturn.
The prospect of tighter supplies also offered crude some support, after Kazakhstan signaled that it will comply with recent production quotas set by the OPEC+.
The cartel agreed to extend ongoing production cuts until at least the second quarter of 2025, amid persistent concerns over slowing demand.
US inventories in focus
Traders will also have to digest official data from the Energy Information Administration on Wednesday showed US crude stocks fell by 934,000 barrels in the week to Dec. 13, compared with expectations for a 1.6 million-barrel draw.
"When factoring in the SPR, the draw was even smaller, with total US crude oil inventories falling by just 0.4m barrels. Total (EPA:TTEF) US commercial crude oil stocks stand at 421m barrels, 6% below the five-year average," said analysts at ING, in a note.
