On Wednesday, crude prices rose, bolstered by benevolent US inflation data as well as industry data that showed a larger-than-expected draw in U.S. stockpiles.
Brent oil futures were 0.5% higher at $81.09 per barrel, while West Texas Intermediate crude futures were 0.4% higher at $78.69 per barrel.
Data released on Wednesday showed that in July, consumer prices in the U.S. rose by less than expected on an annualized basis, increasing the chances that the Fed would start reducing interest rates at its meeting in Sept.
According to the Labor Department, the consumer price index (CPI) last month rose by 2.9%, slightly lower than June’s 3.0%. Excluding more volatile items such as food and fuel, the core number rose by 3.2% in the year to July, lower than the estimated 3.3%.
This release came after Tuesday’s lower-than-expected producer price index for July and confirmed the generally benevolent inflationary pressures, which may see the U.S. central bank cutting its policy rate from the range of between 5.25% and 5.50% it has been in for over a year.
The possibility of an interest rate cut presents a better outlook for the U.S. economy, especially amid recent worries that slowing growth would require more rate cuts by the Fed.
According to CME Fedwatch Traders moved slightly more towards a 0.5% cut in Sept.
