Oil lower ahead of key US inflation data, strong dollar index

Oil prices fell on Tuesday amid a strong US dollar index and ahead of key US inflation data and speeches by Federal Reserve (Fed) officials, News.Az reported, citing Anadolu Agency.

International benchmark Brent crude traded at $83.16 a barrel at 11:19 a.m. local time (0819 GMT), down 0.24 percent from the previous session’s close of $83.36 a barrel.

U.S. benchmark West Texas Intermediate (WTI) traded at $78.92 a barrel at the same time, down 0.25 percent from the previous session, which ended at $79.12 a barrel.

Market players await inflation data from the US, the world’s largest oil consumer.

US consumers’ short-term inflation expectations rose in April, according to a survey released Monday by the Federal Reserve Bank of New York.

The median estimate of one-year inflation rose to 3.3% in April from 3% in March.

Analysts expect rising inflation forecasts and the cautious stance of US Federal Reserve officials could negatively affect risk appetite in global markets.

Fed Vice Chairman Philip Jefferson said interest rates should be kept at current “restrictive” levels until there are signs of clear progress in reducing inflation.

Comments by Fed officials dampened hopes for a rate cut in the country, fueling concerns about slowing economic growth and energy consumption.

The rise of the US dollar against other currencies helped lower oil prices. The U.S. dollar index rose 0.14 percent to 105.25, signaling lower oil demand for currency users.

Meanwhile, wildfires in Canada spreading across the country’s oil and gas-rich regions are threatening supply and limiting oil price declines.

Last year, there was a 300,000-barrel-a-day cut in production due to wildfires in Canada.

Market players are also awaiting the OPEC report on the oil market, scheduled for release later in the day. The report is expected to reveal supply and demand data for this year and 2025.

News.Az