Oil prices rise more than 1% on Fed rate cut outlook, signs of rising gasoline demand
Oil rig pumpjacks, also known as thirsty birds, extract crude from the Wilmington Field oil deposits area near Long Beach, California, on July 30, 2013.

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.