Oil prices steadied Wednesday as the market waited for U.S. inflation data later in the day that will likely influence the Federal Reserve’s policy on interest rate hikes.
Brent crude gained 14 cents, or 0.2%, to $85.75 a barrel while U.S. West Texas Intermediate rose 10 cents, or 0.1%, to $81.63 a barrel.
Prices had risen about 2% on Tuesday amid optimism that the U.S. Federal Reserve is getting closer to ending its cycle of interest rate hikes, making dollar-priced oil cheaper for buyers holding other currencies.
The U.S. consumer price index is expected to show March core inflation rose 0.4% on a monthly basis (USCPF=ECI) and 5.6% year-on-year (USCPFY=ECI), according to a Reuters poll of economists.
Philadelphia Federal Reserve Bank President Patrick Harker said on Tuesday that he felt the U.S. central bank may soon be done raising interest rates, while Minneapolis Federal Reserve Bank President Neel Kashkari said he believed inflation, now at a rate of 5% by the Fed’s preferred measure, will get to “the mid-threes” by the end of this year.
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.
The U.S. government will release its stockpile data at 10:30 a.m. (1430 GMT) on Wednesday.
In another negative for oil demand, the International Monetary Fund on Tuesday trimmed its 2023 global growth outlook, citing the impact of higher interest rates.
The market also awaits clarity on oil demand and supply, with monthly reports from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency due on Thursday and Friday, respectively.