Oil prices saw limited gains on Tuesday on investor caution ahead of US inflation data due Wednesday, which will reflect the impact of oil supply cuts and rising prices as well as the US Fed Reserve’s monetary policy.
International benchmark crude Brent traded at $90.75 per barrel at 10.13 a.m. local time (0713 GMT), a 0.12% gain from the closing price of $90.64 a barrel in the previous trading session on Monday.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $87.48 per barrel, up 0.22% from the previous session’s close of $87.29 per barrel.
Brent climbed to $91.45 a barrel on Monday, still hovering around 10-month highs, as investors fretted about tightening supplies following Russia and Saudi Arabia’s plans to limit output until the end of the year. The OPEC+ group’s major producers also stated that their output curbs could be revised up or down depending on market conditions.
The OPEC group will release its monthly oil market report that will show the group’s updated production plan as well as its demand forecast for this year and 2024.
However, the rising value of the US dollar limited price increases. When the US dollar strengthens against other currencies, dollar-indexed crude oil becomes more expensive and consequently less lucrative for holders of other currencies.
Boosting demand fears and blunting further gains, the European Union downgraded its economic outlook on Monday, projecting slower growth for EU countries in 2023 and 2024.
Investors are now awaiting a set of data in the US, including Wednesday’s consumer price index (CPI) report, to seek direction and anticipate the Fed’s next move on interest rates.
If US crude oil inventory data to be released by the Energy Information Administration on Wednesday reveals a stockpile build, then it is expected that demand will fall, weighing on prices.
