US Federal Reserve Chair Jerome Powell on Wednesday suggested oil volatility is not having a material impact on the US economy.
Mr Powell was pressed on geopolitical risks after the Fed held interest rates steady at about 3.64 per cent. Geopolitical risks were flagged as one of the top near-term risks to financial stability, according to the Fed's most recent financial stability report, published in December.
“Geopolitical risk for us is – a lot of it is around energy, oil,” he said.
Developments in Iran and Venezuela this year have led to a new bout of volatility in the oil markets.
Oil prices rose higher on Wednesday after Mr Trump warned a “massive armada” is headed towards Iran amid heightened tension between Washington and Tehran. In a post on Truth Social, Mr Trump also warned “time is running out” for Iran to negotiate on a deal on its nuclear programme.
Brent, the global benchmark for crude, was trading 1.68 per cent higher at $68.71 a barrel as of 5.16pm ET. West Texas Intermediate, which measures US crude oil, was up 1.12 per cent at $63.51 a barrel.
In his social media post, Mr Trump said the fleet led by the USS Abraham Lincoln carrier strike group is a “larger fleet” than the one the US sent when it captured Venezuelan leader Nicolas Maduro this year.
Industry experts have previously said the US capture of Mr Maduro would probably have a limited impact on oil prices.
