Oil futures rose Thursday, on track for a fourth straight winning session as crude tests levels last seen in January of 2020 as traders found reassurance in testimony this week by Federal Reserve Chairman Jerome Powell.
West Texas Intermediate crude for April delivery rose 30 cents, or 0.5%, to $63.52 a barrel on the New York Mercantile Exchange. May Brent crude, the global benchmark, was up 35 cents, or 0.5%, at $66.53 a barrel on ICE Futures Europe.
Oil rose Tuesday and Wednesday “because Fed Chair Powell said he would continue to do what he thinks is necessary keep rates lower for longer,” said Robert Yawger, director of energy futures for Mizuho Securities USA, in a note.
Powell “has stressed his intention to keep a steady hand in two days of testimony on Capitol Hill. Risk assets have liked what they have heard,” Yawger said.
Meanwhile, monetary policy is overshadowing the probable loosening of production cuts by the Organization of the Petroleum Exporting Countries and its allies beginning in April, said Eugen Weinberg, analyst at Commerzbank, in a note.
OPEC and its allies, a group known as OPEC+, is voluntarily restraining output by 7 million barrels a day. Saudi Arabia unilaterally cut its output by an additional 1 million barrels a day for February and March.
“From April, the members of the alliance will likely want in view of the higher oil prices to step up their production by a further 500,000 barrels per day. And Saudi Arabia is hardly likely to maintain its production cuts without the participation of the other countries,” Weinberg wrote.