• U.S. crude exports hit record highs, inventories rise
  • Recession fears appear to be easing – analyst
  • Western officials finalize Russian oil price cap plan

LONDON, Oct 27 (Reuters) – Oil rose on Thursday, extending a rally of nearly 3% in the previous session, on optimism over record U.S. crude exports and signs of waning recession fears. outweighing concerns about weak demand in China.

Wednesday’s figures showed record exports of U.S. crude, an encouraging sign for demand. EIA/ Speculation that central banks could be nearing the end of their rate hike cycles added support, after the European Central Bank raised rates by 75 basis points.

“It seems recession fears have subsided lately, but betting continuously on healthy economic growth will prove foolhardy,” said Tamas Varga, an analyst at PVM, an oil broker.

Brent crude rose 87 cents, or 0.9%, to $96.56 a barrel as of 1354 GMT. U.S. West Texas Intermediate (WTI) crude gained $1.60, or 1.8%, to $89.51.

Concerns about Chinese demand limited the recovery. Global investors dumped Chinese assets at the start of the week on growth fears as the economy plagued by a zero-COVID policy, a real estate crisis and declining market confidence. China is the biggest energy consumer in the world.

“Fears that China’s confused economic policies could continue under the growing power of President Xi Jinping weighed on sentiment,” said Hiroyuki Kikukawa, managing director of research at Nissan Securities.

Weakness in the US dollar early in the session, which hit a one-month low, provided support for oil, although the US currency rallied later. A weaker dollar makes oil cheaper for holders of other currencies and tends to reflect greater investor appetite for risky assets.

Crude slumped on economic concerns after surging earlier this year following Russia’s invasion of Ukraine, with Brent nearing its all-time high of $147 in March.

US and Western officials are finalizing plans to impose a cap on Russian oil prices amid a warning from the World Bank that any plan will require the active participation of emerging market economies to be effective.

Additional reporting by Yuka Obayashi in Tokyo; Editing by Mike Harrison and Kirsten Donovan

Our standards: The Thomson Reuters Trust Principles.

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