WASHINGTON (dpa-AFX) - Oil prices were little changed in European trade on Thursday as the dollar index held at its highest levels since mid-December after a hawkish Fed announcement.
Brent crude futures for April delivery were virtually unchanged at $88.74, after having climbed 2 percent on Wednesday.
U.S. West Texas Intermediate (WTI) crude futures for March settlement were marginally higher at $87.38.
The dollar index rose to a level last seen on Nov. 22 and the yield on the 10-year Treasury note rose to 1.8566 percent from 1.846 percent after the Federal Reserve confirmed the very hawkish expectations of the market.
The U.S. central bank signaled its first rate hike since 2018 will happen 'soon.'
Asset purchases are likely to halt in March while the process of balance sheet reduction will commence after it has begun raising rates.
The United States is the world's biggest oil user and it is feared that the Fed tightening could delay the global economic recovery.
The dollar rose on higher U.S. Treasury yields, making dollar-denominated oil more expensive for buyers using other currencies.
Meanwhile, growing tensions over Ukraine offset data showing a larger than expected increase in U.S. crude inventories last week.
The United States is 'ready either way' in handling the escalating Ukraine crisis, U.S. Secretary of State Antony Blinken told reporters as the Biden administration's top envoy delivered a written response to Russia, laying out a serious diplomatic path forward and rejecting some of Russia's key demands.
Data released by U.S. Energy Information Administration (EIA) showed crude inventories increased by 2.4 million barrels last week, as against forecasts for a 728,000-barrel decline.
Gasoline stockpiles rose by 1.3 million barrels in the week ended January 21 - smaller than the expected rise of about 2.5 million barrels.
The distillates inventories were down 2.8 million last week, more than twice the expected decline.
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