SINGAPORE – US oil prices remained above US$100 a barrel in Asian trade on Tuesday on stronger demand, but trading was subdued ahead of new Fed chief Janet Yellen's testimony to Congress.
New York's main futures contract, West Texas Intermediate (WTI) for delivery in March, was down five cents to $100.01 a barrel in mid-morning trade, but was see-sawing in volatile trade.
WTI closed above $100 on Monday, bolstered by falling US inventories which indicate bigger demand.
Brent North Sea crude for March delivery was up two cents to $108.65. Analysts said investors were waiting for the testimony in Congress this week by Yellen, who took over from Ben Bernanke as chair of the US central bank. Yellen will brief legislators on the state of the US economy and the direction of monetary policy.
Yellen's first hearing will be Tuesday in the House of Representatives, with attention on how she might view a second consecutive weak monthly jobs report released on Friday, and how that might affect the Fed's drawdown of its stimulus operation.
"No one is expecting any surprises from her prepared text," said DBS Bank in a research note.
"Yellen is unlikely to deviate from the well telegraphed views of the FOMC (Federal Open Market Committee), in particular, a more optimistic US economic outlook this year and the 'steady and measured' pace of ending asset purchases by December."
DBS said the main focus for investors would be the question and answer session with US legislators.
Global markets are closely watching the pace of the winding down of the government's massive stimulus package for the US economy.
The health of the US economy is a key influence on oil prices as the United States is the world's biggest oil consumer. AFP