Crude oil futures rose Wednesday as U.S. Federal Reserve Chair Jerome Powell indicated that interest rates will likely come down this year though the central bank is moving cautiously.
Figures released Wednesday morning showed the West Texas Intermediate contract for April gained $1.58, or 2.02%, to $79.73 U.S. a barrel. May Brent futures added $1.15, or 1.4%, to $83.19 a barrel.
Traders will be closely watching Powell’s testimony before the House Financial Services Committee on Wednesday for more detail on the central bank’s monetary policy plans for the year.
“But the economic outlook is uncertain, and ongoing progress toward our 2% inflation objective is not assured,” the Fed chair said.
Lower interest rates typically stimulate the economy, which leads to more demand for crude.
Oil prices have been creeping higher this year, booking two consecutive months of gains, as the Organization of the Petroleum Exporting Counties and its allies, known as OPEC+ has slashed production and geopolitical tensions continue to simmer in the Middle East.
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