Crude oil benchmarks, which plunged following the hawkish rhetoric by the Fed on Wednesday have recovered the day's losses and are currently trading in overnight green territory. Lending support to the prices is the recent report by the International Energy Agency which increased the world oil demand growth.
In the summary of economic projections released by the Fed on Wednesday, the peak federal funds rate has been raised to 5.1 percent, from 4.6 percent projected in September and 3.8 percent projected in June 2022. The Fed's as-expected 50-basis points rate hike and the higher-than-expected projected peak rate had triggered a fresh concern over a prolonged period of higher interest rates and economic uncertainty, dragging down crude oil prices.
Brent Oil Futures for February settlement which had previously closed at $82.70 dropped to as low as $80.11, before recovering to its current level of $82.75, registering an uptick of 0.06 percent. The day's high was $83.17.
West Texas Intermediate Crude Oil Futures for January settlement plunged to $76.31 before recovering to its current level of $77.36, implying an overnight gain of 0.10 percent. The benchmark which was at $77.28 at previous close has touched a high of $77.76 in the day's trade.
Earlier, data from the U.S. Energy Information Administration revealed an unexpected 10-million- barrel accumulation in inventories. Markets were expecting a 3.6-million-barrel draw from inventories as compared to a 5.2-million-barrel draw in the previous week.
