(Bloomberg) -- Oil extended gains after the Federal Reserve raised rates by an expected quarter percentage point.
West Texas Intermediate traded above $70 a barrel for the first time in a week Wednesday following Energy Information Administration data that showed oil exports rose to a record while domestic fuel stockpiles declined.
Prices edged higher after the central bank delivered another 25 basis-point hike but left their year-end forecast unchanged, which the market embraced as a sign of confidence in the economy.
“The knee-jerk reaction in risk assets is to the upside, as the market anticipates the end of the tightening cycle is near and cuts could be forthcoming,” said Daniel Ghali, a commodity strategist at TD (TSX:TD) Securities.
Banking turmoil drove crude to a 15-month low last week as risk appetite evaporated. Caught in the maelstrom was famed oil trader Pierre Andurand’s hedge fund, which is down 40% this year with most of the losses coming in March.
Despite the leg lower, Andurand and others remain bullish on the outlook for crude, in part due to China’s rebound from Covid lockdowns, with lofty predictions reaching $140 a barrel.
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