# Oil up 2% as dollar weakens on small US Fed rate hike Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-03-22 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Oil Prices Rise 2% as Dollar Slides on Fed Rate Hike Pause Meta Description: Oil prices climb as dollar falls after Fed rate hike, hinting at pause. Brent settles at $76.69 and WTI at $70.90, highest since March 14. URL: https://financedigest.com/oil-up-2-as-dollar-weakens-on-small-us-fed-rate-hikehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-03-22t020841z1lynxmpej2l01vrtroptp4global-oil-1736814274988-compressed.jpg) By Scott DiSavino NEW YORK (Reuters) -Oil prices rose about 2% to a one-week high on Wednesday as the dollar slid to a six-week low after the U.S. Federal Reserve delivered an expected [small rate](https://www.financedigest.com/interest-rates-are-cut-to-an-all-time-low-what-will-this-mean-for-small-businesses.html "Interest rates are cut to an all-time low. What will this mean for small businesses?") hike while hinting that it was on the verge of pausing future increases. Brent crude futures rose $1.37, or 1.8%, to settle at $76.69 a barrel, while U.S. West Texas Intermediate crude (WTI) ended $1.23, or 1.8%, higher at $70.90. That was the highest closes for both crude benchmarks since March 14. The [Fed raised interest rates](https://www.financedigest.com/dollar-hits-one-month-high-against-yen-as-traders-bet-on-fed-rate-hike.html "Dollar hits one-month high against yen as traders bet on Fed rate hike") by a quarter of a percentage point, but indicated it was on the verge of pausing further increases in borrowing costs amid recent turmoil in financial markets spurred by the collapse of two U.S. banks. Today’s 25-point [rate hike by the Fed](https://www.financedigest.com/wall-street-slips-dollar-gains-as-fed-seen-hiking-rates-in-may.html "Wall Street slips, dollar gains as Fed seen hiking rates in May") provided no surprises but the accompanying language prompted some increase in risk appetite that easily spilled into the oil space,” analysts at energy consulting firm Ritterbusch and Associates told customers in a note. The U.S. [dollar fell to its lowest level since](https://www.financedigest.com/dollar-retreats-headed-for-biggest-weekly-loss-since-mid-january-bitcoin-down.html "Dollar retreats, headed for biggest weekly loss since mid-January; bitcoin down") Feb. 2 against a basket of other currencies, supporting [oil demand by making crude](https://www.financedigest.com/oil-dips-after-fed-comments-us-crude-stock-build.html "Oil dips after Fed comments, US crude stock build") cheaper for buyers using other currencies. The [oil markets](https://www.financedigest.com/the-edible-oils-market-to-grow-on-an-innovation-revealing-spree.html "The Edible Oils Market To Grow On An Innovation Revealing Spree") shrugged off the U.S. Energy Information Administration’s (EIA) weekly [data that showed crude stockpiles rose 1.1 million barrels last week](https://www.financedigest.com/dollar-dips-ahead-of-inflation-data-later-this-week.html "Dollar dips ahead of inflation data later this week") to a 22-month high. \[EIA/S\] \[API/S\] Analysts in a [Reuters poll](https://www.financedigest.com/european-central-bank-to-raise-deposit-rate-to-3-25-by-mid-year-reuters-poll.html "European Central Bank to raise deposit rate to 3.25% by mid-year: Reuters poll") had forecast a 1.6-million barrel withdrawal. But the official EIA [data showed a smaller](https://www.financedigest.com/soft-lending-and-inflation-data-pave-way-for-smaller-ecb-hike.html "Soft lending and inflation data pave way for smaller ECB hike") build than the 3.3-million barrel increase reported on Tuesday by the American Petroleum Institute (API), an industry group. We just have a lot of [crude oil](https://www.financedigest.com/oil-near-flat-as-us-crude-stock-draw-contends-with-economic-concerns.html "Oil near flat as US crude stock draw contends with economic concerns") in storage and it’s not going to go away anytime soon,” said Bob Yawger at Mizuho. U.S. crude stockpiles have grown since December, boosting inventories to their highest since May 2021. Gasoline and distillate inventories, meanwhile, fell last week by more than analysts expected. WTI and Brent prices last week fell to their lowest since 2021 on concern that banking sector turmoil could trigger a [global recession and cut oil demand](https://www.financedigest.com/global-factory-activity-weakens-as-demand-falters.html "Global factory activity weakens as demand falters"). An emergency rescue of [Credit Suisse](https://www.financedigest.com/mitsubishi-ufj-to-postpone-at1-bond-issuance-in-credit-suisse-fallout.html "Mitsubishi UFJ to postpone AT1 bond issuance in Credit Suisse fallout") Group AG over the weekend helped revive oil prices. The Organization of the Petroleum Exporting Countries and its allies like Russia, a group known as OPEC+, is likely to stick to its deal on output cuts of 2 million barrels per day (bpd) until the end of the year, despite the plunge in [crude prices](https://www.financedigest.com/oil-prices-dip-on-u-s-crude-reserve-release-inflation-pressure.html "Oil prices dip on U.S. crude reserve release, inflation pressure"), three delegates from the producer group told Reuters. (Additional [reporting by Rowena Edwards in London](https://www.financedigest.com/london-reclaims-place-as-preeminent-global-financial-centre-for-the-first-time-since-2013-according-to-global-regulatory-outlook-report-from-duff-phelps.html "London reclaims place as preeminent global financial centre for the first time since 2013, according to Global Regulatory Outlook report from Duff & Phelps"), Shariq Khan in Bengaluru, Sudarshan Varadhan in Singapore and Andrew Hayley in Beijing; Editing by Marguerita Choy and David Gregorio) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---