Oil Ends Sharply Higher on Output Hopes, Dovish Fed

Oil futures ended sharply higher Wednesday, boosted by a smaller-than-expected weekly climb in U.S. crude stockpiles.

Plans for a meeting of major oil producers next month to discuss limiting output and a dovish Federal Reserve statement, which pressured the U.S. dollar, added to gains for crude futures.

April West Texas Intermediate crude rose $2.12, or 5.8%, to end at $38.46 a barrel on the New York Mercantile Exchange. May Brent crude climbed by $1.59, or 4.1%, to finish at $40.33 a barrel on London’s ICE Futures exchange.

The Federal Reserve projected it would deliver just two rate increases in 2016 versus an earlier forecast for four hikes. The surprisingly dovish tone sank the U.S. dollar, lifting oil and other commodities priced in the currency. A weaker greenback can make assets priced in dollars more attractive to buyers using other currencies.

Market Watch

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.