Oil prices rise on IEA's optimistic demand forecast

Oil prices are rising on the back of an optimistic forecast for demand growth published today by the International Energy Agency (IEA). However, prices erased much of their earlier gains after the regular weekly report on U.S. inventories. Investors are now awaiting the outcome of a meeting of the U.S. central bank's monetary policy committee (Fed).

At around 17:15 CEST, the price of North Sea Brent crude was up 0.2 percent at $74.41 a barrel. U.S. light crude WTI was up 0.1 percent at $69.51 a barrel at the same time.

Both benchmarks rose by more than three percent the previous day amid expectations of higher fuel demand following a cut in the short-term lending rate by China's central bank.

Investors expect the Fed to announce a pause in interest rate hikes today amid an uncertain economic outlook and the impact of previous rate increases. The Fed has raised rates ten times since March last year. Higher interest rates strengthen the dollar, making oil more expensive for non-U.S. investors. A pause in rate hikes could also support economic growth and oil demand.