Oil prices rose in early trading on Wednesday, extending the gains achieved during the past two days, as the dollar fell after Federal Reserve Chairman Jerome Powell appeared less hawkish on interest rates than markets expected, and with a sudden decline in US crude stocks.
With less sharp increases in US interest rates, the market hopes that the world’s largest economy and oil consumer will be able to avoid a sharp slowdown in economic activity or even recession and avoid a decline in oil demand.
price move
Brent crude futures settled unchanged at $83.68 a barrel at 0347 GMT, after recording gains of 3.3 percent in the previous session.
US West Texas Intermediate crude futures rose 11 cents, or 0.14 percent, to $77.25 a barrel, after jumping 4.1 percent in the previous session, according to Archyde.com data.
The dollar index fell slightly to 103.29 in early trading, extending losses after Powell’s comments on Tuesday, which made oil cheaper for holders of other currencies.
Supporting the market, the weekly inventory data released by the American Petroleum Institute showed that crude inventories fell by about 2.2 million barrels in the week ending February 3rd.
That differed from the expectations of nine analysts polled by Archyde.com, who estimated crude inventories growth at around 2.5 million barrels.
However, gasoline and distillate inventories rose more than expected. Gasoline stocks rose by 5.3 million barrels, and distillate stocks, which include diesel and heating oil, rose by 1.1 million barrels.
The market will be looking to see if US Energy Information Administration data, due at 1530 GMT on Wednesday, confirms the decline in crude stocks.