UPDATE 7-Oil up 2% as dollar weakens on small US Fed rate hike


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      U.S. Fed boosts interest rates by quarter of a percentage

      U.S. dollar falls to six-week low

      Oil market shrugs off U.S. crude stocks rise to 22-month

 (Adds latest prices, U.S. Fed rate decision)
    By Scott DiSavino
       NEW YORK, March 22 (Reuters) - 
    Oil prices rose about 2% to a one-week high on Wednesday as
the dollar slid to a six-week low after the U.S. Federal Reserve
delivered an expected small rate hike while hinting that it was
on the verge of pausing future increases.
        Brent crude futures LCOc1   rose $1.37, or 1.8%, to
settle at $76.69 a barrel, while U.S. West Texas Intermediate
crude (WTI)  CLc1  ended $1.23, or 1.8%, higher at $70.90.
        That was the highest closes for both crude benchmarks
since March 14.
    Fed raised interest rates
     by a quarter of a percentage point, but indicated it was on
the verge of pausing further increases in borrowing costs amid
recent turmoil in financial markets spurred by the collapse of
two U.S. banks.
        "Today’s 25-point rate hike by the Fed provided no
surprises but the accompanying language prompted some increase
in risk appetite that easily spilled into the oil space,"
analysts at energy consulting firm Ritterbusch and Associates
told customers in a note.
        The U.S. dollar  .DXY  fell to its lowest level since
Feb. 2 against a basket of other currencies, supporting oil
demand by making crude cheaper for buyers using other
    The oil markets shrugged off the U.S. Energy Information
Administration's (EIA) weekly data that showed crude stockpiles
rose 1.1 million barrels last week to a 22-month high.  EIA/S 
     Analysts in a Reuters poll had forecast a 1.6-million
barrel withdrawal. But the official EIA data showed a smaller
build than the 3.3-million barrel increase reported on Tuesday
by the American Petroleum Institute (API), an industry group.
        "We just have a lot of crude oil in storage and it's not
going to go away anytime soon," said Bob Yawger at Mizuho.
    U.S. crude stockpiles have grown since December, boosting
inventories to their highest since May 2021. Gasoline and
distillate inventories, meanwhile, fell last week by more than
analysts expected.
        WTI and Brent prices last week fell to their lowest
since 2021 on concern that banking sector turmoil could trigger
a global recession and cut oil demand. An emergency rescue of
Credit Suisse Group AG  CSGN.S  over the weekend helped revive
oil prices.
    The Organization of the Petroleum Exporting Countries and
its allies like Russia, a group known as OPEC+, is likely to
stick to its deal on output cuts of 2 million barrels per day
(bpd) until the end of the year, despite the plunge in crude
prices, three delegates from the producer group told Reuters.

 (Additional reporting by Rowena Edwards in London, Shariq Khan
in Bengaluru, Sudarshan Varadhan in Singapore and Andrew Hayley
in Beijing; Editing by Marguerita Choy and David Gregorio)
 ((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters
Messaging: scott.disavino.thomsonreuters.com@reuters.net))

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