Oil prices rose for a sixth consecutive session on Tuesday, following a wide stock market surge in anticipation of Federal Reserve Chair Jerome Powell’s testimony, which is expected to shed light on the future course of monetary tightening.
Brent crude futures had risen 25 cents, or 0.29%, to $86.43 a barrel by 9.59 A.M. (Thai time) after settling 0.4% higher on Monday.
U.S. West Texas Intermediate crude was at $80.62 a barrel, up 16 cents, or 0.20%, following a 1% gain in the previous session.
Optimism regarding a rebound in Chinese demand and the ramping up of new Asian and Middle Eastern refining facilities have contributed to Brent prices rising for the sixth consecutive session, the longest such climb since May 2022.
Later on Tuesday, Powell will begin two days of testimony before Senate and House committees in Washington, D.C.
In the Fed’s upcoming meeting on March 21-22, traders in Fed funds futures are pricing in a 76% chance of a rate hike of 25 bps and a 24% chance of a rate hike of 50 bps.
The price of crude oil has fluctuated this year due to factors including Fed rate hike expectations and an optimistic view of Chinese demand after Covid Zero. The world’s largest oil importer set a moderate economic growth target this year, reducing optimism.
Energy traders are also keeping an eye on Russia as sanctions are imposed on the country for its involvement in the conflict in Ukraine. Gunvor Group CEO Torbjorn Tornqvist says the Russian government’s March plan to cut oil production by 500,000 barrels per day hasn’t affected exports yet.