Oil prices climb amid questions over scale of US rate hike

Brent crude futures for September delivery rose 80 cents, or 0.8%, to $99.90 a barrel by 0007 GMT, while WTI crude rose 69 cents, or 0.7%, to $96.47 a barrel.

The Fed’s most hawkish policymakers on Thursday said they favoured another 75-basis-point interest rate increase at the U.S. central bank’s policy meeting this month, not the bigger rate raise that traders had raced to price in after a report Wednesday showed inflation was accelerating.

The Fed rate hike is expected to follow a similar move by the Bank of Canada, which surprised the market on Wednesday with a 100-basis-point increase.

The rate hike uncertainty, along with weak economic data, caused both benchmark contracts to drop at one stage on Thursday to below the Feb. 23 close, the day before Russia invaded Ukraine in what Moscow calls “a special military operation”. Still, both Brent and WTI had clawed back nearly all losses by the end of the trading session.

U.S. President Joe Biden will on Friday fly to Saudi Arabia, where he will attend a summit of Gulf allies and call for them to pump more oil.

However, spare capacity at members of the Organization of the Petroleum Exporting Countries is running low, with most producers pumping at maximum capacity, and it is unclear how much extra Saudi Arabia can bring into the market quickly.