Oil Rises for the Third Day as Dollar Weakens

Oil prices rose in early trading, continuing the gains made over the past two days, as the dollar weakened after Federal Reserve Chairman Jerome Powell appeared less hawkish on interest rates than the markets had expected, along with a surprising decline in U.S. crude inventories. Brent crude futures increased by 11 cents, or 0.1%, to $83.80, adding to the 3.3% gain from the previous session. Meanwhile, West Texas Intermediate (WTI) crude futures rose by 13 cents, or 0.2%, to $77.27, following a 4.1% jump in the last session. The dollar index dipped slightly to 103.29 in early trading, continuing its losses after Powell's comments yesterday, making oil cheaper for holders of other currencies. With less aggressive increases in U.S. interest rates, the market hopes that the world’s largest economy and oil consumer can avoid a sharp slowdown in economic activity or even a recession, thereby preventing a decline in oil demand. Supporting the market, weekly inventory data from the American Petroleum Institute showed that crude stocks dropped by about 2.2 million barrels in the week ending February 3, according to market sources. This contrasted with the expectations of nine analysts surveyed by Reuters, who estimated a growth in crude stocks of about 2.5 million barrels.