Oil prices edged higher on Tuesday after traders took advantage of profit-taking from low prices ahead of the release of US consumer inflation data on Tuesday and interest rate decisions by top central banks on Wednesday.
International benchmark Brent crude traded at $72.37 per barrel at 9.51 a.m. local time (0651 GMT), a 0.74% rise from the closing price of $71.84 a barrel in the previous trading session on Monday.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $67.45 per barrel, up 0.49% from the previous session’s close of $67.12 per barrel.
Both benchmarks lost around 4% on Monday over fears of a global economic recession and a decline in global oil demand.
Oil prices recorded the worst losses in nearly two weeks, with Brent dropping to $71.58 a barrel and WTI to $66.80 a barrel, prompting traders to cash in on low prices in support of a price recovery.
The declining value of the dollar also aided the increase in dollar-indexed oil prices.
The US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, declined 0.35% to 102.860 on Tuesday.
Markets now await US consumer inflation data expected later in the day and the Fed’s decision on interest rates due Wednesday.
The Fed is expected to pause its rate hike cycle. However, signs of relatively high inflation keep traders wary of any surprises from the bank. Even if the Fed pauses its rate hike cycle, US interest rates are expected to remain high this year, which may pressure economic activity and oil prices.
The markets are also focused on the decisions of the European Central Bank and the Bank of Japan, which are all set to announce interest rate decisions this week.
