On Thursday, oil prices were stable after falling in the previous session. One day earlier, oil prices fell due to concerns regarding the inflation in the U.S. Problems may prompt the federal government to release more strategic crude stockpiles to drive down prices.
Brent crude futures dropped 2.5% and West Texas Intermediate (WTI) futures fell 3.3% on Wednesday. Reports that U.S. inflation increased at the fastest rate in 30 years pushed the dollar higher. Furthermore, crude inventories in the U.S. rose after the government released some strategic reserves. Oil prices fell due to reports regarding inflation and the government’s decision to release some strategic reserves.
Brent crude futures added 18 cents or 0.2% to $82.82 a barrel at 01:56 GMT. In the meantime, WTI futures rose 17 cents, or 0.2% to $82.51.
Oil prices and consumer price index
On Wednesday, the consumer price index (CPI) showed U.S. prices were rising at a 6.2% year-over-year rate, the most since 1990. This index is a basket of products ranging from gasoline and health care to groceries and rents.
In regards to a monthly basis, the consumer price index increased 0.9% against the 0.6% estimate. So-called core CPI rose 0.6% against the estimate of 0.4%. We should not forget about annual core inflation. It ran at a 4.6% pace, compared with the 4% expectation and the highest since August 1991.
Fuel oil prices jumped 12.3% for the month, part of a 59.1% increase over the previous year. In total, energy prices rose 4.8% in October and are up 30% for the 12-month period.
Used vehicle prices once again played an important role, rising 2.5% on the month and 26.4% for the year.
In October, food prices also showed a sizable bounce, up 0.9% and 5.3% respectively.
U.S. President Joe Biden wants to reduce energy costs. He asked the National Economic Council to work to reduce energy costs. Biden wants the Federal Trade Commission to tackle market manipulation in the energy sector to reverse inflation.
One possible solution is to release more crude from the U.S. Strategic Petroleum Reserve (SPR). Crude inventories increased by 1 million barrels in the week to November 5, compared with analysts’ expectations for an increase of 2.1 million barrels.
According to the Energy Information Administration, inventories of gasoline and distillates like diesel fell last week.
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