Oil prices steadied on Wednesday after rising in the previous session on expectations that fuel demand will continue to strengthen as the U.S. Federal Reserve is likely to raise interest rates more slowly than expected.
Brent crude futures were up 2 cents at $83 a barrel while U.S. West Texas Intermediate (WTI) crude futures rose 16 cents to $81 a barrel adding to a 3.8% jump in the previous session.
However, Brent and U.S. crude oil futures are trading at their highest since the highly contagious Omicron COVID-19 variant emerged in late November and has not impacted fuel demand the way previous variants did.
Federal Reserve Chairman Jerome Powell said on Tuesday the economy of the United States, the world’s biggest oil consumer, should weather the current COVID-19 surge with only “short-lived” impacts and was ready for the start of tighter monetary policy.
Data from the American Petroleum Institute (API) industry group, however, painted a weaker picture on fuel demand, with a smaller decline in crude stockpiles than expected and bigger builds than expected in gasoline and distillate inventories.