Oil prices rebound, trading up after tepid U.S. inflation data
BENGALURU -Oil prices rebounded from early losses on Thursday and swung into positive territory, as tamer-than-expected U.S inflation data offset worries that renewed COVID-19 curbs in China would hurt fuel demand.
After three days of declines, crude futures rallied to rise by more than $1 a barrel after the inflation data supported investor hopes that the U.S. Federal Reserve would temper its interest rate hikes, which could support oil demand.
“Inflation has finally started to drop like a rock in the U.S. and this is the best news that anyone can expect,” said Avatrade analyst Naeem Aslam.
Brent crude rose $1.09 to $93.74 a barrel by 11:26 a.m. EDT (1626 GMT). U.S. West Texas Intermediate crude rose 87 cents to $86.70.
Gains were limited because China is battling a rebound in infections in several economically vital cities, including Beijing. In the manufacturing hub of Guangzhou, millions of residents were told to get tested for COVID-19 on Wednesday.
Russia’s withdrawal of troops from Kherson in Ukraine also acted as a counterweight to the positive momentum, said Matt Smith, analyst at Kpler.
Crude surged earlier this year as Russia’s invasion of Ukraine raised concern about supply, with Brent coming close to its record high of $147. Prices have since fallen on concern of a possible recession. Brent has dropped more than 6% this week.
The market came under pressure on Wednesday from a big rise in U.S. crude inventories. They rose by 3.9 million barrels, taking inventories to their highest since July 2021.
Source : Reuters