Oil jumps on lower-than-expected CPI
Saudi Arabia supplies more than half of Bangladesh’s crude imports, but Dhaka has been hit hard by a global surge in energy and food prices.—Reuters photo
Oil prices rose on Wednesday as cooling US inflation data spurred hopes that the Federal Reserve is getting closer to ending its cycle of interest rate hikes and cushioned the impact of a small build in US crude oil stocks.
Brent crude gained $1.49, or 1.7%, to $87.10 a barrel by 1603 GMT while US West Texas Intermediate rose $1.52, or 1.9%, to $83.06. Prices had risen about 2% on Tuesday.
The US Consumer Price Index (CPI) climbed 0.1% last month after advancing 0.4% in February, the Labour Department said on Wednesday.
In the 12 months to March 31 the CPI increased 5%, the smallest year-on-year gain since May 2021. The CPI rose 6% year on year in February.
“The CPI number implies, to a certain degree, that the Fed will start cutting rates by the end of the year. That’s a positive demand development for energy,” said Robert Yawger, Director of energy futures at Mizuho Securities.
Crude inventories rose by 597,000 barrels in the last week to 470.5 million, compared with analysts’ expectations in a Reuters poll for a 600,000 barrel drop.
US gasoline stocks fell by 300,000 barrels, while distillate stockpiles, which include diesel and heating oil, fell by 0.6 million barrels. Both draw downs were smaller than analysts’ forecasts.
Published in The Express Tribune, April 13th, 2023.
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