Crude oil futures rose Wednesday as Federal Reserve Chair Jerome Powell indicated that interest rates will likely come down this year, though the central bank is moving cautiously.

The West Texas Intermediate contract for April gained 98 cents, or 1.25%, to settle at $79.13 a barrel. May Brent futures added 92 cents, or 1.12%, to settle at $82.96 a barrel.

Powell told the House Financial Services Committee Wednesday that the Fed needs to see “a little more data” before moving on rates, though he expects the central bank will begin loosening policy this year as it gains more confidence that inflation is under control.

In prepared remarks, the Fed chairman said the central bank thinks rates have peaked. Lower interest rates typically stimulate the economy, which leads to more demand for crude.

Tamas Varga, an analyst at oil broker PVM, told clients in a note Tuesday that uncertainty surrounding interest rate cuts is “public enemy No. 1” of a protracted oil rally.

“The Fed chair’s testimony and the ECB interest rate decision on Thursday could revive hopes for a June reduction in borrowing costs,” Varga wrote in a research note.

U.S. commercial crude stockpiles, meanwhile, rose by 1.4 million barrels last week, according to the Energy Information Administration. The inventory buildup is down substantially from prior weeks as refineries process more crude into finished products.

U.S. gasoline stockpiles fell by 4.5 million barrels during the same period, suggesting that demand is picking up.

Oil prices have been creeping higher this year, booking two consecutive months of gains, as OPEC+ has slashed production and geopolitical tensions continue to simmer in the Middle East.