Oil holds loss after Fed raises rates to highest in 22 years

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Oil steadied after its first daily loss in a week that was driven by the Federal Reserve raising borrowing costs to the highest in 22 years and US inventories shrinking less than expected.

West Texas Intermediate traded near $79 a barrel, after slipping 1.1 per cent on Wednesday.

The Fed raised interest rates for the 11th time since March 2022, and signalled further increases were still possible.

Nationwide crude stockpiles fell by just 600,000 barrels, although inventories at the storage hub in Cushing, Oklahoma dropped to the lowest since May.

Saudi Arabia is expected to extend its one million barrel a day oil supply cut into September as it seeks to foster a tentative recovery in prices, according to a Bloomberg survey. With Russia also curbing output, banks including Standard Chartered are anticipating a deepening shortfall in the coming months.

The tightening supply outlook, along with signs that top importer China may move to stimulate its economy further, has helped crude rally over the previous few weeks.

Futures are still marginally down this year, with tightening monetary policy in the US and Europe and lackluster growth in China weighing on prices earlier in the year.

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