The oil prices rose about 2% on Tuesday, on the hope that the Federal Reserve (fed) could ease its monetary tightening path after a key US inflation report this week, although concerns about Chinese demand remain.
Brent crude futures closed up $1.43, or 1.7%, at $85.61 a barrel. The futures of West Texas Intermediate (WTI) rose $1.79, or 2.24%, to $81.53 a barrel.
Investors grew more optimistic that the Federal Reserve is getting closer to ending its cycle of interest rate hikes, making dollar-priced oil cheaper for buyers holding other currencies.
The perspective that the fed raise your interest rate just one more time and in a 25 basis point increment is a useful starting point, but the central bank’s monetary policy path will depend on the data coming in, the US Federal Reserve’s chairman said Tuesday. New York, John Williams.
The report on the us inflation to be released on Wednesday could help investors gauge the near-term path of interest rates.
However, the data from China showed that consumer inflation in March rose at its slowest pace since September 2021, suggesting that weak demand persists amid an uneven economic recovery.
Oil futures are up more than 7% since the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, surprised the market with a new round of production cuts starting in May.
The OPEC production it will fall by 500,000 bpd in 2023, then rise by 1 million bpd in 2024, after the group’s production deal expires, the US Energy Information Administration forecast on Tuesday.
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