Oil prices rose on Tuesday amid expectations of potential economic stimulus from China, healthy demand in the rest of Asia, and lower US crude inventories.
Brent crude futures rose 64 cents, or 0.8%, at 0557 GMT to $84.82 a barrel, and West Texas Intermediate (WTI) futures gained 67 cents, or 0.8%, to $80.41 a barrel.
Data from China showed consumer inflation in March reached its slowest pace since September 2021. The drop in Chinese consumer inflation has led to expectations of economic stimulus, which could spur the government to further stimulate the economy.
Crude oil futures rose as the dollar eased on expectations that the US Federal Reserve is close to ending its cycle of rate hikes. A weaker dollar makes oil cheaper for those holding other currencies.
As more central banks such as the Reserve Bank of Australia and the Bank of Korea stopped interest rate hikes, the expectation for the Fed to further reduce it’s tightening policy was strengthened.
In India, the world’s third-largest oil consumer, strong fuel demand signs also supported prices in March. Last month, fuel consumption reached a record level of 4.83 million barrels per day, up 5% from the previous year.
Oil futures are up more than 5% since the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, surprised the market last week with a new round of production cuts that will begin in May.
On the US supply front, industry data on US crude inventories will be released today. Analysts estimate crude oil inventories fell by about 1.3 million barrels in the week through April 7.
A US inflation report to be released Wednesday could help investors gauge the short-term course of interest rates.
