Crude oil prices climb on hopes for Fed slowing interest rate hikes

Crude oil prices climb on hopes for Fed slowing interest rate hikes

Oil prices rose on Friday on optimism that the U.S. Federal Reserve will ends its tightening cycle, buoying the economy and boosting fuel demand. Brent futures for March delivery gained 48 cents, or 0.6%, to $86.64 a barrel by 0113 GMT, while U.S. crude advanced 54 cents to $80.87 per barrel, a 0.7% gain.

The benchmarks were on track for a second straight week of gains. Both closed 1% higher on Thursday, near their highest closing levels since Dec. 1. According to most economists in a Reuters poll, the Fed will end its tightening cycle after a 25 basis point hike at each of its next two policy meetings, and then likely hold interest rates steady for at least the rest of the year.

Meanwhile the dollar index was headed for a second consecutive weekly decline. A weaker dollar makes crude, priced in the currency, cheaper for foreign buyers. Also extending support to prices, Chinese oil demand climbed by nearly 1 million barrels per day (bpd) from the previous month to 15.41 million bpd in November, the highest level since February, according to the latest export figures published by the Joint Organisations Data Initiative.

A rebound in Chinese economy and the Russian oil industry’s struggles under sanctions could tighten energy markets in 2023, International Energy Agency (IEA) head Fatih Birol said on Thursday.