Investing.com - With the Fed put on the economy in, via the central bank's promise to be patient with rate hikes, and OPEC doing all it can to squeeze supplies amid sanctions on Venezuelan oil, all it might take for crude to enter an extended rallly is a U.S.-Sino trade deal.
New York-traded West Texas Intermediate Crude punched above key $55 resistance Thursday to reach a year-to-date and January gain of more than 21%, its best for a month since 2015. London-traded Brent, meanwhile, was up more than 15% on the year.
WTI was up 95 cents, or 1.8%, at $55.18 per barrel by 11:38 AM ET (16:38 GMT), after reaching a 10-week high of $55.37.
Brent, the global oil benchmark, rose by 60 cents, or 1%, to $62.14. Its session high was $62.47.
Both WTI and Brent have jumped about 6% since Tuesday, a run-up that began with the Trump administration's sanctions against Caracas' state-owned oil firm PDVSA, which effectively halts the flow of Venezuelan crude, a heavy sulfur-laden grade that's critical for making diesel and other transportation fuels, to the U.S.
The rally accelerated on Wednesday after weekly U.S. oil data showed a drop of 1.1 million barrels in Saudi exports of crude to the United States, in keeping with Riyadh's promise since December to cut production to boost prices that crashed 40% in the fourth quarter of 2018.
Oil picked up more steam in Wednesday's after-hours trade as the Federal Reserve held rates steady at its monthly policy meeting. Fed Chairman Jerome Powell, who oversaw four rate hikes last year, says now he will consider the economy first before any tightening. That was called the Powell Put on Wall Street, or action by the Fed to prevent equities from dropping too much. (after the similar Greenspan Put during the '90s). Powell actually denied there was such a thing at his press conference.
Thursday's gains come on the back of speculation of better prospects for a U.S.-Sino trade deal amid reports that President Donald Trump will meet China’s top trade negotiator in the Oval Office for high-level talks.
"This would be the final piece in the bullish oil puzzle," said Phil Flynn, energy analyst at The Price Futures Group brokerage.