Oil prices held steady as the market awaited the U.S. inflation report later in the day, which will greatly impact the Federal Reserve’s policy on raising interest rates.
Brent crude oil prices were up 14 cents, or 0.2%, at $85.76 a barrel, while U.S. West Texas Intermediate was up 10 cents, or 0.11%, at $81.64 a barrel.
Prices advanced about 2% on optimism that the U.S. Federal Reserve is nearing the end of raising interest rates, making the dollar more valuable to oil investors in other currencies.
The U.S. Consumer Price should show that March core inflation rose 0.42% month-on-month and 5.62% year-over-year.
The President of the Federal Reserve Bank of Philadelphia said he thinks the U.S. central bank may soon stop raising interest rates.
As traders are wary of the potential for inflation data to fall on the more bullish side of expectations, it would not be surprising to see the current bullish market sentiment before a more cautious turn to these key macro numbers.
Meanwhile, data from the American Petroleum Institute showed that crude oil inventories rose by about 380,000 barrels in the week ended April 7.
Gasoline inventories increased by about 450,000 barrels, while analysts had expected a decline of 1.62 million barrels.
In another negative spin on oil demand, the International Monetary Fund on Tuesday revised its global growth outlook for 2023 to reflect the impact of higher interest rates.
The market is also waiting for the openness of oil demand and supply. Monthly statistics from the Organization of the Petroleum Exporting Countries and the IEA will be released on Thursday.
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