Oil dips 1%, reversing gains after bearish data

OPEC forecasts robust demand growth despite surging inflation

HOUSTON:

Oil prices fell about 1% on Tuesday in choppy trading, reversing earlier gains as US consumer prices unexpectedly rose in August, giving cover for the US Federal Reserve to deliver another hefty interest rate increase next week.

Brent futures for November delivery fell 78 cents to $93.22 a barrel, a 0.8% loss, by 17:49 GMT. US crude fell 54 cents, or 0.6%, to $87.24 per barrel.

The consumer price index gained 0.1% last month after being unchanged in July, the U.S. Labor Department said. Economists polled by Reuters had forecast a 0.1% fall. Fed officials are set to meet next Tuesday and Wednesday, with inflation way above the U.S. central bank’s 2% target.

Fed officials are set to meet next Tuesday and Wednesday, with inflation way above the US central bank’s 2% target.

“The Fed may have to raise rates quicker than expected which could cause a ‘risk back off’ sentiment in crude and further strength to the dollar,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Oil is generally priced in US dollars, so a stronger greenback makes the commodity more expensive to holders of other currencies.

Published in The Express Tribune, September 14^th, 2022.

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