April 12, 2023 (MLN): Oil prices remained flat on Wednesday, with the market eagerly anticipating U.S. inflation data that could affect the Federal Reserve’s stance on future interest rate hikes.
Brent crude remained steady at $85.28 per barrel, up by 0.02%, during the early Asian trading session, while U.S. West Texas Intermediate crude (WTI) also held steady at $81.42 per barrel, with a decrease of 0.02%.
On Tuesday oil prices had risen about 2%, mainly driven by optimism that the U.S. Federal Reserve is nearing the end of its interest rate hike cycle, leading to cheaper dollar-priced oil for buyers holding other currencies.
Yeap Jun Rong, an analyst at IG Market, stated in a client note that a rise in inflation beyond expectations could pave the way for an additional 25 basis-point rate hike in June, as reported by Reuters.
Data from the American Petroleum Institute (API) disclosed that crude inventories increased by around 380,000 barrels in the week ending April 7. Additionally, the API report also indicated that gasoline inventories grew by approximately 450,000 barrels, while analysts had expected a drawdown of 1.6 million barrels.
The market is also waiting for monthly reports from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency, which are due on Thursday and Friday, respectively, to provide more clarity on oil demand and supply.
As the market remains uncertain about the future of oil prices, investors are closely following the inflation report, which is scheduled for release today, to better understand the direction of interest rates.
