Oil prices rose on Wednesday, hitting a seven-week peak as violence in Syria and tensions with Iran reinforced geopolitical fears and U.S. Federal Reserve Chairman Ben Bernanke downplayed the risk of a double-dip recession.
Crude futures posted their sixth straight gain with lift from U.S. gasoline futures, which notched the biggest percentage gain in the oil futures complex. Gasoline moved above its 200-day moving average, boosted by the government’s inventory report showing gasoline stocks fell last week, against expectations for a rise.
“Crude continues to show upside bias after the (second-quarter) sell-off, with the economy slowing seeming to be priced in and geopolitical worries and the gasoline draw down supportive,” said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
The Fed does not expect the U.S. economy to lurch back into recession, Bernanke told the House Financial Services Committee in a second day of congressional testimony that helped assuage worries about slowing demand for oil in a sluggish economy.