Oil prices rose 2% following Powell’s comments at Jackson Hole.

Powell endorsed the Fed’s monetary policy easing, stating that a further cooling of the labor market would not be welcome. He also expressed confidence that inflation was within reach of the central bank’s 2% target.

U.S. light crude oil climbed more than $2 per barrel on Friday after comments from Federal Reserve Chairman Jerome Powell indicated that the central bank was preparing to cut interest rates.

Brent crude futures rose $1.80, or 2.33%, to $79.02 per barrel, while U.S. West Texas Intermediate (WTI) crude futures added $1.82, or 2.49%, to $74.83 per barrel.

Both benchmarks reached their lowest levels since early January this week after the U.S. government sharply reduced its estimate of job creation by businesses over the 12 months through March, raising concerns about a potential recession.

On Friday, Powell supported the Fed’s monetary policy easing, stating that a further cooling of the labor market would not be welcome. He also expressed confidence that inflation was within reach of the U.S. central bank’s 2% target.

“Upside risks to inflation have diminished, and downside risks to employment have increased,” Powell said in a speech at the Kansas City Fed’s annual economic conference in Jackson Hole. “The time has come to adjust monetary policy. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolution of the outlook, and the balance of risks.”

The dollar index weakened to around 101.45 ahead of Powell’s speech. A weaker dollar typically boosts oil demand, as crude is priced in the greenback, making it more attractive to investors holding other currencies.

On Friday, Morgan Stanley noted in a report that declining oil inventories had provided some support for crude prices.

Recent data from China, the world’s largest oil importer, points to a struggling economy and slowing crude demand from refineries. The resumption of ceasefire talks in Gaza between Israel and Hamas has also helped ease supply concerns, weighing on oil prices.

U.S. and Israeli delegations began a new round of meetings in Cairo on Thursday to resolve differences over a ceasefire proposal.