Oil prices witnessed a noticeable rise after the US Federal Reserve indicated it was continuing its plans to reduce interest rates during the current year. Which strengthened the appetite for risk and weakened the US dollar.

Global Brent crude oil rose to more than $86 a barrel, recovering from its biggest decline in almost a month, which it saw after entering the overbought zone.

Federal Reserve officials maintained their expectations of cutting interest rates three times this year, after keeping monetary policy unchanged. The weakness of the US currency tends to boost the prices of dollar-denominated commodities, including oil.

US crude oil inventories nationwide fell by 1.95 million barrels; Declining for the second week in a row and remaining below the five-year seasonal average, a larger than expected decline in gasoline stocks was also observed.

“While there are signs that the oil recovery is losing momentum, oil and broader markets have received some relief from the Fed confirming its expectations to cut interest rates three times this year,” said Warren Patterson, head of commodity strategy at ING Groep NV.

Crude oil has risen more than 10% this year, supported by the extension of the OPEC+ alliance to reduce oil production, and geopolitical tensions, including Ukrainian drone attacks on Russian refineries and rising transportation costs due to strikes on ships in the Red Sea, have also supported oil prices. However, gains were capped by increased non-OPEC+ supply.

Expectations indicate continued fluctuations in oil prices during the coming period, being affected by multiple factors, such as Federal Reserve policy, developments in supply and demand, and geopolitical tensions.