© Reuters.
Investing.com — Oil prices rose slightly in early U.S. trade on Tuesday, although gains remained limited after faster-than-anticipated U.S. inflation data pointed to sticky price pressures that could complicate the timeline for potential Federal Reserve interest rate cuts.
expiring in May climbed by 0.4% to $82.55 a barrel, while added 0.5% to $77.94 per barrel by 10:39 ET (14:39 GMT).
The annualized reading of the closely-watched increased by 3.2% last month, quicker than estimates that it would stay at a pace of 3.1% notched in January. The year-on-year , which strips out volatile items like food and fuel, cooled to 3.8% from 3.9%, but was still slightly above projections of 3.7%.
Month-on-month, the rose by 0.4% in February, in line with expectations and faster than the 0.3% uptick in January. The gauge came in at 0.4%, matching the prior month and marginally hotter than expectations of 0.3%.
Fed officials have made easing inflation the major objective of a series of interest rate hikes that have brought borrowing costs up to more than two-decade highs. Several policymakers have suggested that cuts may be coming later this year, but have stressed that they first need to see more evidence that price growth is sustainably slowing back down to their 2% annualized target.
In theory, the prospect of higher-for-longer interest rates could weigh on broader U.S. oil demand.
Crude markets grapple with mixed demand, supply cues
Crude prices have been largely rangebound in recent sessions amid conflicting signals on demand and supply. and WTI futures have traded within the $85 a barrel to $75 a barrel range for the past three weeks.
Oil markets are assessing downbeat demand signals out of China, the world’s largest crude importer. Beijing set a middling growth target for 2024, and also offered scant insight into more stimulus measures. These concerns were partially offset by hopes for demand, as several refiners in the country began increasing production after an extended break.
Markets were now awaiting a monthly report from the Organization of the Petroleum Exporting Countries for more cues on demand, especially after the oil group said it will maintain its current pace of output cuts until end-June.
On the supply front, signs of little deescalation in the Israel-Hamas war pointed to continued supply risks in the Middle East. Clashes involving the Yemen-based Houthi group also presented continued disruptions in shipping activity in the Red Sea.
A monthly report from the is also due later this week.
Ambar Warrick contributed to this report.
