Oil prices increased on Thursday from the US central bank’s comments of unchanged interest rates and with a drop in US crude production after the Texas cold snap.
International benchmark Brent crude was trading at $66.50 per barrel at 0716 GMT for a 0.48% decrease after closing Thursday at $66.18 a barrel.
American benchmark West Texas Intermediate (WTI) was at $63.52 per barrel at the same time for a 0.47% drop after it ended the previous session at $63.22 a barrel.
Oil prices jumped to their highest levels since December 2019 after US Federal Reserve Chairman Jerome Powell said the central bank would not start raising interest rates until the economic targets are achieved in employment rates and inflation.
Even as the labor market improves, it could be difficult to get new jobs for a portion of the 10 million people currently out of work, he said.
Investors are keeping tabs on developments on the US President Biden’s proposed $1.9 trillion relief measure, which the House of Representatives is expected to take up and vote on later this week. The proposal includes stimulus payments of up to $1,400 for individuals and expanded unemployment benefits and support for state and local governments.
Meanwhile, US crude production dropped almost 10% last week to 1 million barrels per day (bpd) after the US’s energy hub of Texas was caught unprepared for the unprecedented cold weather last week, which saw almost 65% of the region’s production curtailed.
The rise in the oil prices came despite a surprise build in the US crude inventories.
US commercial crude oil inventories rose by 1.3 million barrels, or 0.3%, to 463 million barrels, relative to the market expectation of a fall of 5.3 million barrels, according to data released by the EIA on Thursday.
By Sibel Morrow