Oil futures climbed on Wednesday to close back above $100 a barrel as traders assessed comments from the Federal Reserve on monetary policy and the U.S. economy, and weekly data showing a jump in U.S. crude supplies and a drop in oil-product inventories.Oil prices added to gains in the minutes ahead of the Nymex close as traders digested the Federal Reserve’s decision to continue tapering its bond-buying stimulus program as expected. But the central bank also shifted the factors that could prompt the first rate hike since 2006. In a press conference, Chairwoman Janet Yellen said the Fed got a bit carried away by optimism about the economy in January.
Crude oil for April delivery CLJ4 +0.05% advanced 67 cents, or 0.7%, to settle at $100.37 a barrel on the New York Mercantile Exchange — the highest close since March 10. It was trading at around $100.11 shortly before the government supply data were released early Wednesday and it stood at about $100 before the Fed’s policy decision, which came ahead of the Nymex close. “The Fed announcement did not have much impact on the crude-oil market,” said John Macaluso, research analyst at Tyche Capital Advisors. “The U.S. dollar DXY +0.81% rallied following the announcement, which should put pressure on crude oil as the 8th consecutive build in supply data [reported] this morning gets priced in.”
But “the front-month volatility should settle down as that contract comes off the board,” he said. April crude futures expire at the Nymex close Thursday. “We believe that it would take some sort of geopolitical/fundamental news for crude to go any higher,” said Macaluso.