Oil Prices Move Higher on Tight Supplies, Firm Demand Outlook

Oil drills are pictured in the Kern River oil field in Bakersfield, California November 9, 2014. REUTERS/Jonathan Alcorn/File Photo
Oil drills are pictured in the Kern River oil field in Bakersfield, California November 9, 2014. REUTERS/Jonathan Alcorn/File Photo
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Oil Prices Move Higher on Tight Supplies, Firm Demand Outlook

Oil drills are pictured in the Kern River oil field in Bakersfield, California November 9, 2014. REUTERS/Jonathan Alcorn/File Photo
Oil drills are pictured in the Kern River oil field in Bakersfield, California November 9, 2014. REUTERS/Jonathan Alcorn/File Photo

Oil prices recovered on Thursday from a steep drop in the previous session, supported by tight oil supply and peak summer consumption, after a US rate hike sparked fears of slower economic growth and less fuel demand.

Brent crude futures rose 77 cents, or 0.7%, to $119.28 a barrel by 0400 GMT while US West Texas Intermediate (WTI) crude futures climbed to $116.33 a barrel, up $1.02, or 0.9%, Reuters reported.

Prices slipped more than 2% overnight after the Federal Reserve raised interest rate by three-quarters of a percentage point, the biggest hike since 1994.

The dollar index retreated from a 20-year high, easing downward pressure on oil prices. A stronger greenback makes US dollar-priced oil more expensive for holders of other currencies, curtailing demand.

Investors remained focused on tight supplies and robust demand as Western sanctions restricted access to Russian oil.

"It was overall a volatile session across almost all markets yesterday," said Howie Lee, an economist at Singapore's OCBC bank.

"Tight fundamentals suggest any dips in oil prices are likely to be short-lived, or shallow, or possibly both."

Optimism that China's oil demand will rebound as it eases COVID-19 restrictions also supported the price outlook.

"A rebound in China demand sentiment, and expected seasonal ramp-up in OECD oil demand into August leaves price risk to the upside through 3Q 2022," said Baden Moore, head of commodities research at the National Australia Bank.

US crude production, which has been largely stagnant over the last few months, edged up 100,000 barrels per day last week to 12 million bpd, its highest level since April 2020, data from the Energy Information Administration showed.

US crude stocks and distillate inventories rose while gasoline inventories fell in the week through June 10, the EIA said.



Iran Lawmakers Move to Sack Country’s Economy Minister as Rial Plunges 

A currency dealer counts Iranian rials as the value of the rial drops, in Tehran, Iran, February 9, 2025. Majid Asgaripour/WANA (West Asia News Agency) via Reuters
A currency dealer counts Iranian rials as the value of the rial drops, in Tehran, Iran, February 9, 2025. Majid Asgaripour/WANA (West Asia News Agency) via Reuters
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Iran Lawmakers Move to Sack Country’s Economy Minister as Rial Plunges 

A currency dealer counts Iranian rials as the value of the rial drops, in Tehran, Iran, February 9, 2025. Majid Asgaripour/WANA (West Asia News Agency) via Reuters
A currency dealer counts Iranian rials as the value of the rial drops, in Tehran, Iran, February 9, 2025. Majid Asgaripour/WANA (West Asia News Agency) via Reuters

Iran’s parliament on Wednesday received a motion from lawmakers seeking to dismiss Economy Minister Abdolnaser Hemmati amid a sharp decline in the national currency, the rial.

Under Iranian law, Hemmati must appear before the legislature within 10 days to defend his record in a session that could result in his removal.

Ahmad Naderi, a Tehran MP and member of the parliament’s presiding board, said 91 lawmakers had signed the motion.

The move follows closed-door talks between President Masoud Pezeshkian and Hemmati with MPs over the plunging rial, which has lost nearly half its value since Pezeshkian took office in July.

On the black market, the rial is now trading at more than 900,000 to the US dollar, compared with less than 600,000 in mid-2024.

The slide has accelerated since the fall of Syrian president Bashar al-Assad, a longtime Iranian ally, on December 8.

Decades of US-led sanctions have battered Iran’s economy, with inflation worsening since Washington pulled out of a landmark 2015 nuclear deal in 2018.

US President Donald Trump, who returned to the White House in January, has revived his policy of “maximum pressure” on Iran, further tightening restrictions on the country.

Pezeshkian has vowed to seek a return to the nuclear accord and the lifting of sanctions, but diplomatic efforts have so far to make any headway.

In April 2023, lawmakers dismissed the industry minister Reza Fatemi Amin over soaring car prices.