Oil above $110, stock futures edge past Powell, OPEC

Futures for the S&P 500 rose 0.1% on Wednesday, a day after the benchmark index fell 1.6%. The contract was up 0.2% for the Dow Jones Industrial Average and 0.1% for the technology-focused Nasdaq-100.

In premarket trading, shares of Exxon Mobil rose 2.3% after the energy major said it was halting operations at a multibillion-dollar oil-and-gas project in Russia. Hewlett Packard Enterprise raised its earnings forecast for the year, lifting shares 4% ahead of the bell.

In Europe, the pan-continental stokes Europe 600 hovered near the flatline.

The stock has been volatile in recent weeks. Investors are responding to rapid developments on the Ukrainian battlefield, West-initiated sanctions on Moscow, and a succession of major companies cutting ties with Russia. By driving up energy prices, the conflict has added to uncertainty about a possible increase in interest rates this year.

Energy markets extended their bullish run on Wednesday. Crude oil prices exceeded $110 a barrel for the first time since 2014 as refiners refused to buy Russian oil, running out of global energy supplies. International benchmark Brent-crude futures rose 5.8% to $111.03 a barrel, extending its advance so far this year to 43%.

Prices jumped in other parts of the energy market linked to Russia. European natural gas prices increased by 30%. According to analysts, so far there has been minimal disruption to the pipeline system in Ukraine, through which almost a third of Russian gas exports to Europe.

OPEC and its Russian-led allies are due to meet on Wednesday. Analysts expect they will go ahead with plans to increase production by 400,000 barrels per day, although many members of the cartel are struggling to meet their quotas.

Rising oil prices have caused headaches for central banks dealing with the fastest inflation rates in decades. Mr. Powell will begin the first two days of testimony on monetary policy and the economy when he appears before the House Committee on Financial Services at 10 a.m. ET.

Yields on benchmark 10-year Treasury notes rose to 1.732% before Mr Powell’s testimony, up from 1.708% on Tuesday. Yields and bond prices move in opposite directions.

Lawmakers are likely to put pressure on Mr Powell over the pace of the rate hike, the inflation outlook and the possible economic fallout from Russia’s invasion of Ukraine. The Fed is widely expected to raise interest rates at its March 15-16 meeting.

However, traders have dialed back expectations that the Fed will raise rates this year as Russia attacked Ukraine on Thursday. According to CME Group, they are pricing in a 6% chance that the bank will raise its benchmark rate to 1.75% or more by the end of the year, up from 54% a week ago.