Investing.com - Oil prices rose in U.S. trading on Wednesday as market participants took up positions on expectations the Federal Reserve will make no changes to its currently loose monetary policies that make oil an attractive commodity.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded up 0.68% at USD93.15 a barrel on Wednesday, off from a session high of USD93.50 and up from an earlier session low of USD92.36.
The Fed will announce is latest decision on interest rates and monetary policy later Wednesday, and oil prices rose on talk of no changes.
Benchmark interest rates are currently near zero, while the Fed is also running a monthly USD85 billion bond-buying program known as quantitative easing, which pumps liquidity into the financial system to spur investing and job demand, weakening the dollar in the process.
A weaker greenback makes oil an attractive investment in dollar-denominated exchanges, especially in the eyes of investors holding other currencies.
Waning fears of messy Cyprus exit from the eurozone pushed up prices as well.
Cyprus's parliament on Tuesday rejected calls to tax banking accounts holding at least EUR20,000 to help come up with EUR5.8 billion to qualify for a EUR10 billion bailout package arranged by eurozone nations and the International Monetary Fund.
Fears that a rejection of the bank deposit tax may cut off access to bailout money began to wane, as hopes began to build Cyprus may seek help elsewhere, possibly in Russia, home to a sizeable chunk of Cypriot depositors.
A Cypriot exit from the eurozone could roil markets and possibly hamper growth, crimping demand for fuels and energy in the process.
Elsewhere on the ICE Futures Exchange, Brent oil futures for May delivery were up 0.83% at USD108.34 a barrel, up USD15.19 from its U.S. counterpart.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
