Crude oil rose over 2% on Tuesday as the Federal Reserve kept interest rates unchanged and pledged they would be kept close to zero for an extended period of time.

Crude for April delivery settled the day up $1.90 at $81.70 a barrel at the New York Mercantile Exchange.

The Fed added that the US economy and employment situation should improve while inflation is expected to remain benign. The weaker dollar also supported demand for the black stuff.

Risk appetite picked up after Standard & Poor's said it no longer has Greece's sovereign ratings under review now its austerity measures are in place. The euro jumped and so did interest in commodities.

Traders will be looking ahead to Wednesday's weekly government stockpile report and OPEC's meeting in Vienna. The oil cartel is expected to keep production targets on hold.

Gold rallied in late afternoon trading as the lower dollar sparked a wave of interest in the precious metal. Gold for April delivery finished up $17.10 at $1,122.50 an ounce at the New York Mercantile Exchange.

Silver for May delivery rose 24.2 cents to $17.35 an ounce while copper for May added 6.5 cents to $3.37 a pound.

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