Oil Prices Rise as Dollar Weakens following Fed’s Rate Hikes

Oil prices surged in early Asian trade on Thursday after the U.S. Federal Reserve raised interest rates by 25 basis points overnight, sending the dollar weaker.

Brent crude futures rose 51 cents, or 0.62%, at $83.35 a barrel as of 9.37 A.M. (Thai time), while West Texas Intermediate (WTI) U.S. crude futures rose 57 cents, or 0.75%, to $76.98 a barrel.

On Wednesday, the Federal Reserve hiked its target interest rate by a quarter of a percentage point and pledged further “ongoing increases” in borrowing rates to combat inflation.

The U.S. central bank noted in a statement that “inflation has eased somewhat but remains elevated,” which is an unambiguous acknowledgement of the work made in slowing the pace of rising prices from the 40-year highs hit last year.

A decline in the value of the US dollar makes oil priced in other currencies more appealing to buyers.

U.S. dollar index last saw at 101.15, down 0.3% in the session against a basket of currencies.