Oil prices hold firm amid hopes for economic growth

Oil prices steadied on Wednesday, following steep gains in the previous session after the U.S. Federal Reserve chief signalled the central bank may raise rates more slowly than expected, which should help support oil demand.

Brent and U.S. crude oil are trading at their highest levels since the highly contagious COVID-19 Omicron emerged in late November, as it has not hit fuel demand the way previous variants did.

U.S. West Texas Intermediate (WTI) crude futures rose 20 cents, or 0.3%, to $81.42 a barrel at 0555 GMT, adding to a 3.8% jump in the previous session.

Brent crude futures were up 6 cents, or 0.07%, at $83.78 a barrel, after jumping 3.5% in the previous session.

Crude stocks fell by 1.1 million barrels for the week ended Jan. 7, according to market sources citing API figures. That was less than the 1.9 million barrel draw that 10 analysts polled by Reuters had expected.

Gasoline stockpiles rose by 10.9 million barrels, compared with analysts’ expectations for a 2.4 million barrel build. Distillate inventories, which include diesel and heating oil, rose by 3 million barrels compared with forecasts for a 1.8 million barrel increase.

At the same time, the EIA pared its production outlook for 2022, expecting U.S. oil output to rise by 640,000 bpd, down from an earlier forecast for an increase of 670,000 bpd.