SINGAPORE: Brent crude edged toward $109 a barrel on Tuesday on cautious optimism that the Federal Reserve's new head will signal the central bank's commodity-friendly monetary policy is to remain for now.
With all eyes on Janet Yellen in her first testimony to Congress, many investors expect her to indicate slower stimulus tapering following recent mixed data in the world's biggest economy.
"If Yellen, as expected, gives a dovish testimony, it will give some assurance to oil markets," said Chee Tat Tan, investment analyst at Phillip Futures in Singapore.
"The greenback would be likely to weaken further, which would help lift demand for crude oil." Brent crude for March delivery was up 8 cents at $108.71 per barrel at 0321 GMT, after settling 94 cents lower.
The contract, which expires on Thursday, traded as high as $109.75 on Monday, its highest since Jan. 2.
US crude traded 6 cent higher at $100.12 a barrel.
The contract closed above the $100-mark on Monday for the first time this year.
The Fed has begun cutting its bond purchases by $10 billion a month as the US economy showed signs of strength. The move marks perhaps its most difficult policy shift after five years of easy money that has provided support for risky assets such as commodities.
The dollar wallowed near a two-week low against a basket of major currencies early on Tuesday.
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