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Tightening Russian supplies boost oil prices
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Gains limited by sharper-than-expected increase in U.S.
stocks
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Dollar gains for third straight session
(Updates with settlement prices)
By Laura Sanicola
Feb 23 (Reuters) - Oil prices settled up 2% on Thursday
on expectations of steep cuts to Russian production next month,
but a stronger dollar and a sharper-than-expected jump in U.S.
inventories added to demand concerns.
Brent crude futures settled up $1.61, or 2%, to
$82.21 a barrel, compared with about $98 a barrel on the eve of
Russia's invasion of Ukraine a year ago.
West Texas Intermediate crude futures (WTI) settled
up $1.44, or 2%, to $75.39 a barrel, ending a sixth session
losing streak.
Prices got an early boost from Russia's plans to cut oil
exports from its western ports by up to 25% in March, exceeding
its announced production cuts of 500,000 barrels per day.
While a stronger dollar remains a near-term headwind for
crude, UBS analysts said they expect lower Russian production
and China's reopening to tighten the oil market and support
prices.
The dollar index rose for the third straight session,
after minutes on Wednesday from the latest U.S. Federal Reserve
meeting showed a majority of Fed officials agreed the risks of
high inflation warranted further rate hikes.
A stronger greenback makes dollar-denominated oil more
expensive for holders of other currencies, hitting demand.
Both oil benchmarks lost more than $2 in the previous session
after release of the Fed minutes.
Oil prices also came under pressure after U.S. government
data showed the country's crude oil inventories rose for the
ninth time in a row last week, stoking demand worries.
U.S. crude stockpiles rose by 7.6 million barrels in the
week to Feb. 17, the U.S. Energy Information Administration
said, more than triple analyst expectations for a 2.1
million-barrel rise. "With respect to pressure coming from the Federal Reserve on
demand and warming weather in the U.S. and Europe there is
overall concern about the demand side," said Tony Headrick,
energy market analyst at CHS Hedging.
(Reporting by Laura Sanicola and Shariq Khan; Additional
reporting Shadia Nasralla
in London; Muyu Xu in Singapore
Editing by David Goodman, David Gregorio, Susan Fenton and Diane
Craft)
