Oil futures rose in early trading on Thursday, recovering some of the prior day's losses, after the International Energy Agency (IEA) said a decline in oil demand due to higher prices would not offset a shut-in of Russian oil supplies.
Front-month Brent crude futures were up about 66 cents, or 0.67%, to $98.68 a barrel at 1222 GMT , while U.S. West Texas Intermediate (WTI) crude was up 84 cents, or 0.86%, to $95.86 a barrel.
Both contracts had settled lower on Wednesday, following an unexpected jump in U.S. crude stockpiles and signs of progress in Russia-Ukraine peace talks. U.S. crude had settled down 1.08% at $95.04 a barrel, while Brent settled down 1.9% at $98.02 a barrel.
Futures kicked off the session higher, however, after the market digested a report from the International Energy Agency that said some 3 million barrels per day of Russian oil output could be shut-in due to Western sanctions and as buyers snub Russian exports. That would exceed a 1 million bpd drop in demand anticipated as a result of higher prices.
"Questions about how much Russian oil will continue to swing and uncertainty in how bad crude demand destruction will get will keep energy markets jittery," Edward Moya, a senior market analyst for OANDA, wrote in a note.
Oil inventories in the United States climbed by 4.3 million barrels in the week to March 11 to 415.9 million barrels, according to the U.S. Energy Information Administration, surpassing analysts' expectations for a decline of 1.4 million barrels.
The oil market largely shrugged off an move by the U.S. Federal Reserve on Wednesday to raise interest rates by one-quarter of a percentage point, as anticipated.