Brent crude oil prices picked up on Thursday after the US Federal Reserve was more positive than expected about the nation’s economic strength. The commodity traded at $106.03 at 6:21 GMT on Thursday morning.
CNBC reported that Fed Chair Janet Yellen closed her first meeting as head of the US central bank by surprising investors with a speech that many took to mean the bank was planning to lower interest rates sooner than expected. Yellen said the bank was planning to finish its asset purchase program by next fall and that a decrease in interest rates could follow about six months later.
Brent prices celebrated the news as it was interpreted by many as a sign that the bank believes the US economy is nearly strong enough to stand on its own. The bank’s decision to taper its monthly bond buying scheme was negative for oil prices as it was seen as removing liquidity from the markets, however this month’s comments were viewed as a vote of confidence for the number one oil consuming nation’s economy.
The problems between Russia and Ukraine continued to keep a floor under Brent prices as investors nervously watched Ukrainian troops pull out of Crimea, effectively surrendering the small peninsula to Russia. US leaders condemned Moscow on Wednesday after Russian troops took over two Ukrainian naval bases.
Tension between the West and Russia is at an all time high as Western leaders try to increase pressure on Russian President Vladimir Putin through economic sanctions. So far, Putin has brushed off Western calls for diplomacy and continued with the annexation of Crimea despite international concern.
BY Laura Brodbeck