Oil prices recovered on Thursday from a steep drop in the previous session, supported by tight oil supply and peak summer consumption, after a hefty US rate hike sparked fears of slower economic growth and less fuel demand.
Brent crude futures rose 86 cents, or 0.7%, to $119.37 a barrel by 0644 GMT while US West Texas Intermediate (WTI) crude futures climbed to $116.27 a barrel, up 96 cents, or 0.8%.
Prices slipped more than 2% overnight after the Federal Reserve raised its key 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."
In Libya, oil output has collapsed due to the shutdown of production and export facilities as a tactic in the country's political stalemate. Production fell to 100,000-150,000 barrels per day, a spokesman for the oil ministry said on Tuesday, a fraction of the 1.2 million bpd seen last year.
Also, optimism that China's oil demand will rebound as it eases Covid-19 restrictions supported the price outlook. - Reuters