Oil steadied in Asia after jumping the most in three months on optimism the Federal Reserve will maintain its path on interest-rate hikes without shifting to a more hawkish policy.
(Bloomberg) — Oil steadied in Asia after jumping the most in three months on optimism the Federal Reserve will maintain its path on interest-rate hikes without shifting to a more hawkish policy.
West Texas Intermediate traded near $77 a barrel after closing 4.1% higher in the previous session. Fed Chair Jerome Powell said Tuesday that more rate increases would be needed, but he also highlighted that disinflation had begun. The remarks weren’t that much different to his comments last week, and were taken as a positive sign by markets, spurring gains in stocks.
Meanwhile, the American Petroleum Institute reported US crude inventories dropped by 2.2 million barrels last week, according to people familiar with the data. Official government figures are due later Wednesday.
READ: Revival in China Oil Demand Fired by Covid Exit and Exports
The oil market has been choppy this year as investors wait for sustained signs of a robust rebound from China following the end of the nation’s restrictive Covid Zero policy. The fallout from fresh sanctions on Russian refined products and its impact on trade flows are also being eagerly watched.
“Oil prices are finding some room to recover,” said Yeap Jun Rong, a market strategist at IG Asia Pte in Singapore. “It will probably take a continuous recovery in China’s demand and further weakness in the US dollar to prompt sustained upside.”
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