Oil powered above $75 a barrel Wednesday on the back of positive sentiments and stocks are mixed as investors assessed prospects for an economic recovery of major economies.
Brent crude rose 1% to $75.57 a barrel and the US benchmark crude WTS is trading above $73 a barrel following another decline in US crude stockpiles. The fall in inventory is adding to positive sentiments.
After Goldman and Bank of America, leading traders are joining in forecasting that the world may be heading to an era of $100 a barrel oil.
Contracts on all three U.S. equity benchmarks were little changed, after two days of gains for the S&P 500 Index. European equities edged lower as a drop in retailers and consumer shares outweighed gains in commodity sectors. Asian equities advanced.
Markets are steadying this week after last week’s volatility spurred by the Federal Reserve’s hawkish tilt at its meeting. Chair Jerome Powell on Tuesday said the central bank would be patient in waiting to lift borrowing costs, and reiterated that while price increases are bigger than expected, they will likely wane.
The Fed’s shift last week to acknowledge higher inflation and pull forward its rate hike projections is “a reflection of more positive longer-term dynamics,” BlackRock Investment Institute strategists led by Jean Boivin wrote in a report. “We believe the Fed’s new outlook will not translate into significantly higher policy rates any time soon. This, combined with the powerful restart, underpins our pro-risk stance.”
Elsewhere, commodities including copper and iron ore climbed. Bitcoin rebounded, rising past $30,000.
