Oil closes higher for the third day with less fear over interest rates – ISTOÉ DINHEIRO

Oil tankers sail along Nakhodka Bay near the port city of Nakhodka in Russia

By Laura Sanicola

(Reuters) – Crude oil rose for a third straight day on Wednesday as investors became more comfortable with risk a day after the Federal Reserve chair’s comments allayed concerns about future interest rate hikes.

Comments from Fed Chair Jerome Powell on Tuesday were seen as less aggressive than feared, boosting risk appetite and weighing on the dollar. A weaker US currency makes dollar-denominated oil cheaper for buyers holding other currencies.

Brent crude closed up $1.40, or 1.7%, at $85.09 a barrel, while U.S. West Texas Intermediate (WTI) crude closed up $1.33, or 1. 7% to $78.47.

Investors are hoping that less aggressive increases in US interest rates will help the world’s largest economy avoid a sharp economic slowdown or recession that would hurt demand for oil. Meanwhile, the end of Covid-19 restrictions in China should also support fuel demand.

“An impending surge in oil demand, coupled with weak global supply growth, will ensure that the oil balance tightens in the coming months,” said Stephen Brennock of oil brokerage PVM.

(Additional reporting by Sonali Paul in Melbourne and Jeslyn Lerh in Singapore);