Oil prices pare gains on U.S. inflation concerns By Reuters

0



By Colleen Howe

BEIJING (Reuters) – Oil prices fell in early Asian trading on Monday, reversing gains from Friday as U.S. inflation data further dimmed the prospects of interest rate cuts anytime soon and boosted the dollar, which hurts oil demand.

futures fell 75 cents, or 0.84%, to $88.75 a barrel while West Texas Intermediate (WTI) futures were down 65 cents, or 0.78%, to $83.20 a barrel by 1221 GMT.

“The sticky U.S. inflation sparks concerns for ‘higher-for-longer’ interest rates”, leading to a stronger U.S. dollar and putting pressure on commodity prices, independent market analyst Tina Teng said.

U.S. inflation rose 2.7% in the 12 months through March, data on Friday showed, above the U.S. Federal Reserve target of 2%. Lower inflation would have increased the likelihood of interest rate cuts, which would stimulate economic growth and oil demand.

The dollar strengthened on the prospect of higher-for-longer interest rates. A stronger dollar makes oil more expensive for those holding other currencies.

But oil prices could swing higher again if U.S. inventory data and China’s PMI index show improvements this week, Teng said.

Brent had settled up 49 cents and WTI up 28 cents on Friday on concerns about disruptions to supply from events in the Middle East.

The market brushed aside potential supply disruptions stemming from Ukranian drone strikes on the Ilsky and Slavyansk oil refineries in Russia’s Krasnodar region over the weekend. The Slavyansk refinery had to suspend some operations after the attack, a plant executive said.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.





Source link

Leave A Reply

Your email address will not be published.