During his speech, Powell acknowledged the possibility of cutting interest rates if inflation pressures continue to ease. This statement alleviated market concerns about a prolonged economic slowdown, which had been weighing heavily on oil prices in recent months. A more favorable interest rate environment is seen as potentially stimulating economic activity and, by extension, boosting demand for oil.

Brent crude rose by 2.5% to settle at $85.32 per barrel, while U.S. West Texas Intermediate (WTI) crude climbed 2.3% to reach $81.74 per barrel. Analysts noted that Powell?s comments gave a significant boost to market sentiment, with investors anticipating stronger demand for fuel if rate cuts materialise.

Additionally, supply concerns persist as OPEC+ continues to implement production cuts. With a tightening supply and potential demand recovery on the horizon, oil prices are expected to remain buoyant. Powell?s remarks also coincided with signs of easing inflation in the U.S., providing further support for a more accommodative monetary policy stance in the future.