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Oil prices rose about 2% to a one-week high on Wed as the dollar slid to a 6-week low after the Fed delivered an expected 0.25% hike while hinting that it was on the verge of pausing future increases.

Brent crude futures rose1.8% to settle at USD76.69l, while WTI ended 1.8% higher at USD70.90.

The Fed raised interest rates by a 0.25%, but indicated it was on the verge of pausing further increases in borrowing costs amid recent turmoil in financial markets spurred by the collapse of two U.S. banks.

"Today's 25-point rate hike by the Fed provided no surprises but the accompanying language prompted some increase in risk appetite that easily spilled into the oil space," analysts at energy consulting firm Ritterbusch and Associates told customers in a note.

The U.S. dollar fell to its lowest level since Feb. 2 against a basket of other currencies, supporting oil demand by making crude cheaper for buyers using other currencies.

The oil markets shrugged off the EIA weekly data that showed crude stockpiles rose 1.1 m barrels last week to a 22-month high.

Analysts in a Reuters poll had forecast a 1.6-m barrel withdrawal. But the official EIA data showed a smaller build than the 3.3-m barrel increase reported on Tuey by the API.

"We just have a lot of crude oil in storage and it's not going to go away anytime soon," said Bob Yawger at Mizuho.

U.S. crude stockpiles have grown since Dec, boosting inventories to their highest since May 2021. Gasoline and distillate inventories, meanwhile, fell last week by more than analysts expected.

OPEC+ is likely to stick to its deal on output cuts of 2 m bpd until the end of the year, despite the plunge in crude prices, three delegates from the producer group told Reuters.