Crude oil futures up after Powell inflation talk
By Daniel Tyson
20:20, 11 January 2022
Crude oil prices rallied Tuesday afternoon after Fed Chair Jerome Powell told the Senate Banking Committee that is weighing his re-confirmation that the Fed realises that high gas prices are hurting the economy.
At mid-afternoon West Texas Intermediate crude futures for February delivery was up nearly 4% at $81.24 a barrel on the New York Mercantile Exchange.
During the committee hearing Tuesday morning, Powell said that the Fed's goal is to lower inflation so that the US economy can expand to put as many people back to work as possible.
Inflation takes toll
“We know that high inflation exacts a toll, particularly for those less able to meet the higher costs of essentials like food, housing, and transportation,” Powell said.
Gasoline futures were trading up nearly 3.8% Tuesday afternoon to $2.37 a gallon on the mercantile exchange.
According to AAA, the national average for a gallon of regular unleaded gas in the US is $3.30. Since November, gas prices have eased about 10%, but that’s after rising 80% from their pandemic low.
Good news for crude
“A long road to normal means the economy will still see a lot of support over the first half of the year, and that is good news for crude prices,” said Edward Moya, OANDA’s senior market analyst for the Americas in an interview with Capital.com.
Crude futures will probably trade between $80 and $100 a barrel, Moya said.
Brent Crude futures traded up 3.73% at $83.91 a barrel on the Intercontinental Exchange Europe Tuesday.
