Oil prices continued their upward movement Wednesday as the dollar fell after Federal Reserve Chair Jerome Powell's comments and investors stepped back to digest mixed signals on US crude inventories.
Brent crude for the April contract edged up 0.2% to $83.82 as of 10:03 am GST, while the US West Texas Intermediate (WTI) crude futures for March delivery rose 0.3% to $77.37 a barrel as of the same time.
Mild weakness in the US dollar benefited crude prices, as the greenback pulled away from recent highs after Powell's remarks Tuesday, making oil cheaper for those holding other currencies.
Powell sounded less hawkish on interest rates than markets had expected. He warned that interest rates could rise further due to strength in the jobs market, yet noted the country was seeing some disinflation after a series of rate hikes through 2022.
The US central bank raised its benchmark rate by a quarter percentage point of 4.5% to 4.75% last week. The move followed a half-point increase in December and four jumbo-sized 75 basis-point hikes earlier.
The improved risk sentiment after Powell's comments, along with a weaker US dollar, "seem to be tapped on for some upside in oil prices, after seeing a lackluster performance since end-January," Reuters cited IG's market analyst Yeap Jun Rong as saying.
"The reservation is that the overnight downside reaction in the US dollar has been more measured as compared to before," added Yeap, noting that any continued recovery in the dollar could still serve as a headwind for oil prices.
