Oil prices held steady on Thursday as markets weighed the possibility of an aggressive and unpredictable rate hike in case of a faster rise in energy demand. After gaining more than 1% earlier in the day, Brent crude futures were down 14 cents, or 0.2%, to $91.41 a barrel. West Texas Intermediate (WTI) crude, which rose more than $2 in the early hours, was up 22 cents, or 0.3%, to $89.88 a barrel.
After the hottest US inflation data in 40 years was released on Thursday, St. Louis Federal Reserve Bank President James Bullard said he wanted a rate hike by July 1st. Accordingly, US stocks fell. The dollar strengthened, and a stronger dollar made oil and other commodities more expensive for those holding other currencies.
US consumer prices posted their biggest annual gain in 40 years. Prices have been mixed with data that appear to be strong inventory statistics, along with signs that the Fed will raise rates faster than expected in 2022. WTI slightly up, Brent down.
Nevertheless, in general, insufficient crude oil supply, low storage, and global production approaching its maximum are pushing oil prices up.
Earlier this week, crude oil gauges hit seven-year highs amid political concerns, and strong demand recovery amid the coronavirus pandemic has kept stockpiles in fuel hubs globally at multi-year lows.
On Wednesday, oil prices rose after ABD crude stockpiles unexpectedly fell last week to their lowest level since October 2018, and fuel demand hit a record high.
Oil prices reversed a slump triggered by the resumption of indirect US-Iran nuclear talks the day before, following the recent above-mentioned all ABD data. A deal could lift US sanctions on Iranian oil and reduce global supply tightness.
On Thursday, the Organization of Petroleum Exporting Countries said world oil demand could rise even more this year as the global economy rebounds strongly.