Oil prices were mostly steady on Wednesday as the market waited for US inflation data later in the day that will likely influence the Federal Reserve’s policy on future interest rate hikes.
Brent crude edged up 3 cents to $85.64 a barrel, while US West Texas Intermediate dipped 2 cents to $81.51 a barrel.
Prices had risen about 2 percent on Tuesday amid optimism that the US Federal Reserve is getting closer to ending its cycle of interest rate hikes, making dollar-priced oil cheaper for buyers holding other currencies.
The US consumer price index is expected to show March core inflation rose 0.4 percent on a monthly basis and 5.6 percent year-on-year, according to a Reuters poll of economists.
Philadelphia Federal Reserve Bank President Patrick Harker said on Tuesday that he feels the US central bank may soon be done raising interest rates, while Minneapolis Federal Reserve Bank President Neel Kashkari said he believes inflation, now at a rate of 5 percent by the Fed’s preferred measure, will get to “the mid-threes” by the end of this year.
Yeap Jun Rong, a market analyst at IG said in a note to clients, however, that any “higher-than-expected inflation print could lay the ground for another 25 basis-point rate hike in June”.
Meanwhile, data from the American Petroleum Institute (API) showed crude inventories rose by about 380,000 barrels in the week ended April 7, sources said, against forecasts from eight analysts polled by Reuters for a decline of 600,000 barrels.
At the same time, gasoline inventories rose by about 450,000 barrels, according to the API report, while analysts had expected a 1.6 million-barrel drawdown. — Reuters
