By Ambar Warrick

--Oil prices rose on Thursday as reports suggested that Russia's supply cuts will be bigger than previously announced, although fears of rising interest rates saw markets nursing steep losses for the week. 

Reuters reported that Moscow is planning to cut oil exports from its western ports by up to 25% in March from the prior month, in a bid to push up oil prices. The move is expected to result in a deeper supply cut than the 500,000 barrels announced earlier this month.

The supply cuts are in response to Western price caps imposed on Russian oil exports, which Moscow has condemned.

rose 0.5% to $80.89 a barrel, while rose 0.5% to $74.28 a barrel by 21:29 ET (02:29 GMT). Both contracts were down around 3% so far this week.

Crude prices tumbled this week as the dollar firmed on a growing number of bets that the Federal Reserve will resume raising interest rates at a sharp clip next month. Markets fear that rising rates will weigh on economic growth later this year, in turn denting oil demand.

showed that most officials supported further raises in interest rates. Hotter-than-expected inflation readings after the meeting could now see more officials call for bigger rate hikes.

released on Wednesday showed that U.S. crude inventories likely surged by 10 million barrels in the week to February 17. The reading usually heralds a similar trend in , which is expected to show that U.S. inventories grew for a ninth consecutive week. The data is due later on Thursday.  

Rising U.S. inventories, coupled with a planned sale of 26 million barrels from the U.S. Strategic Petroleum Reserve, point to a potential supply glut in the world’s largest oil consumer, which is expected to limit any upside for crude prices.

This, along with fears of more demand headwinds from the Fed, weighed heavily on crude markets in recent weeks.

A second reading on is due later in the day. But crude markets have reacted poorly to data signaling resilience in the U.S. economy, as it gives the Fed more economic headroom to keep raising rates.