Oil prices rise on strong U.S. crude exports

Oil prices rise on strong U.S. crude exports

On Thursday, oil prices rose to more than 3 per cent of the previous session, boosted by record U.S. crude exports and a weaker U.S. dollar, though gains were capped in Asia due to fears over slack demand in China.

Brent crude futures rose 20 cents, or 0.2 per cent, to $95.89 a barrel by 0332 GMT. U.S. West Texas Intermediate crude climbed 19 cents, or 0.2 per cent, to $88.10 a barrel.

U.S. crude stocks went up 2.6 million barrels last week, according to the weekly government data on Wednesday, with crude exports rising to 5.1 million barrels a day, the most ever.

There was a solid U.S. crude exports that raised optimism and prompted fresh buys, but concerns that China's muddled economic policies may continue under President Xi Jinping's growing power limited gains in Asia, said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

The global investors dumped Chinese assets early this week on the assumption that ideology may trump growth under China's most powerful leader since Mao Zedong.

The World Bank said in 2023 that energy prices will decline by 11 per cent after Russia's invasion of Ukraine, although slower global growth and COVID restrictions in China could lead to a deeper fall. Moscow has called its actions in Ukraine a special operation. The dollar's weakness added support, as the dollar's strength of late has been a factor that has inhibited oil market gains. The dollar retreated on Thursday as market expectations mounted that the U.S. Federal Reserve will tone down its aggressive stance on interest rate hikes.

A drop in the dollar makes crude less expensive for other currency holders.

The World Bank warns that any plan will need active participation of emerging market economies to be effective, and the US and Western officials are finalizing plans to impose a cap on Russian oil prices.

Officials said no price range has yet to be decided, but one person familiar with the process said the cap will be determined in line with the historical average of $63 - 64 a barrel, a level that could form a natural upper limit.