Oil prices rose on Thursday after US inflation and economic data boosted hopes the Federal Reserve could make fewer rate hikes, and China trade data showed monthly oil imports to be the second-highest on record in June.
Brent crude futures gained 36 cents or 0.5%, at 0400 GMT to $80.47 per barrel, while West Texas Intermediate crude (WTI) futures were up 29 cents, or 0.4%, at $76.04.
Wednesday’s US data showed consumer prices rose moderately in June, recording the smallest annual increase in more than two years. Markets expect another interest rate hike, but oil traders hope it could be lower. Higher rates could slow economic growth and reduce oil demand.
Lower-than-expected US inflation suggests that the Fed’s tightening cycle so far has had the desired effect. Annual consumer inflation in the US remained below expectations at 3 percent in June. The monthly consumer inflation in the country remained below expectations at 0.2 percent. Core inflation came in at 4.8 percent in June, below expectations. Consumer inflation in the markets was expected to be 3.1 percent on an annual basis and 0.3 percent on a monthly basis in June. Core CPI was expected to be 5 percent annually.
The lower-than-expected data on U.S. inflation suggests that the tightening cycle from the Fed so far is having its desired effect in moderating pricing pressures.
Gains appear to be in the game as the weaker US dollar and some recent follow-up on China’s stimulus hopes have acted as catalysts to ease the bearish sentiment.
Meanwhile, China’s crude oil imports in June totaled 52.06 million mt, or 12.67 million barrels per day, up 45.3 percent year on year, reaching the second-highest monthly figure on record, according to customs data released on Thursday.
According to customs data, imports of crude oil increased by 11.7% to 282.1 million mt in the January-June period, while exports of refined petroleum products increased by 44.7% to 31.31 million mt in the January-June period.
By the way, slowing global economic growth, slowing world trade and investment, and geopolitical risks continue to affect China’s trade.
Another factor limiting price increases became the US Energy Information Administration’s (EIA) report of a much larger-than-expected US crude oil stockpile increase of around 6 million barrels last week.
Gasoline inventories remained largely unchanged at 219.5 million barrels during the holiday week of July 4. This is almost unprecedented. However, analysts had expected a major drop in gasoline stocks as drivers hit the road for holiday travel.
