The West Texas Intermediate (WTI) benchmark surpassed $100 per barrel in intraday trading for the first time since October of last year on a wave of upbeat news between February 11 and 12. Brent prices hovered around $109 per barrel.
Fed Chair Janet Yellen indicated in an hours-long testimony on Capitol Hill that the Federal Reserve will likely keep its foot on the gas. She said that with the recovery in the labor market "far from complete," the Fed will likely keep interest rates near zero "well past" the point when unemployment drops to 6.5%. The Fed had previously suggested that once it reached that target, it would pull back on monetary stimulus. She also downplayed the turmoil in emerging markets in recent weeks, which has spooked investors. The bullish remarks lifted the markets, with major indices rising more than 1%. This provided a lift to oil prices.
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Another reason for higher oil prices is a forecast from OPEC, which raised its projection for oil demand growth in 2014. It revised upwards the incremental increase in oil demand for this year by 50,000 barrels per day to 1.09 million barrels per day. That puts OPEC's predicted 2014 global oil demand at 90.98 million bpd. OPEC noted a big reason for its revision was "strong growth" coming from North America and Europe.
Finally, new data from China suggests that oil imports for China hit an all-time high. January crude oil imports jumped 11.9% from the same month a year ago, hitting 6.63 million bpd. Chinese exports also unexpectedly increased in January, shattering expectations with a 10% increase from January 2013. Analysts have been worried about slower growth from China and the danger of a "hard landing" for its economy, but the latest numbers soothed the markets.
Taken together, these events have pushed WTI oil prices over the three-digit mark.
By Joao Peixe
Joao is a writer for Oilprice.com More