He Petroleum rose 2% on Wednesday as cooling US inflation data raised hopes that the Federal Reserve is getting closer to ending its cycle of interest rate hikes, cushioning the impact of a small increase in crude oil inventories in the world’s largest economy.
He Brent crude closed up $1.72, or 2.01%, at $87.73 a barrel, while the West Texas Intermediate in United States (WTI) rose $1.73, or 2.12%, to $83.26 a barrel.
He Consumer’s price index (CPI) of USA it rose 0.1% last month after advancing 0.4% in February, the Labor Department reported. In the 12 months to March, the CPI rose 5%, the smallest year-on-year increase since May 2021.
“The weaker US CPI has raised questions about whether the Fed will now raise rates at all next month,” said Fawad Razaqzada, a market analyst at brokerage StoneX.
“The fall in interest rate expectations is reducing concerns about the recession and, at the same time, helping to support the prices of dollar-denominated assets.”
Government bonds, a proxy for global stocks, and gold rose, while the dollar fell sharply after the data. A weaker US currency makes the oil price in dollars for buyers of other currencies.
Hedge funds have been buying oil futures on the market in recent days in anticipation of improving demand, said Dennis Kissler, senior vice president of trading at BOK Financial.
Lael Brainard, chief economic adviser to US President Joe Biden and former vice president of the Federal Reservealso said that he saw that inflation was coming down.
Markets shrugged off a small rise in US crude inventories, attributing it in part to a congressionally mandated release of oil from the US emergency reserve and lower exports earlier in the month.
Crude inventories rose by 597,000 barrels in the past week to 470.5 million, compared with analyst expectations in a Reuters poll for a drop of 600,000 barrels.
US gasoline stocks fell 300,000 barrels, while distillates, which include diesel and heating oil, fell 0.6 million barrels. Both were lower than analysts’ forecasts.
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