Oil prices settled up 2% on Feb. 23 on expectations of steep cuts to Russian production next month, but a stronger dollar and a sharper-than-expected jump in U.S. inventories added to demand concerns.

Brent crude futures settled up $1.61, or 2%, to $82.21 a barrel, compared with about $98 a barrel on the eve of Russia's invasion of Ukraine a year ago.

WTI crude futures settled up $1.44, or 2%, to $75.39 a barrel, ending a sixth session losing streak.

Prices got an early boost from Russia's plans to cut oil exports from its western ports by up to 25% in March, exceeding its announced production cuts of 500,000 bbl/d.

While a stronger dollar remains a near-term headwind for crude, UBS analysts said they expect lower Russian production and China's reopening to tighten the oil market and support prices.

The dollar index rose for the third straight session, after minutes on Wednesday from the latest U.S. Federal Reserve meeting showed a majority of Fed officials agreed the risks of high inflation warranted further rate hikes.

A stronger greenback makes dollar-denominated oil more expensive for holders of other currencies, hitting demand. Both oil benchmarks lost more than $2 in the previous session after release of the Fed minutes.

Oil prices also came under pressure after U.S. government data showed the country's crude oil inventories rose for the ninth time in a row last week, stoking demand worries.

U.S. crude stockpiles rose by 7.6 MMbbl in the week to Feb. 17, the U.S. Energy Information Administration said, more than triple analyst expectations for a 2.1 MMbbl rise. 

"With respect to pressure coming from the Federal Reserve on demand and warming weather in the U.S. and Europe there is overall concern about the demand side," said Tony Headrick, energy market analyst at CHS Hedging.

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