Oil prices were little changed today after rising in the previous session on expectations of increased fuel demand this summer, but investors are cautious ahead of US consumer price data.
Brent futures for August ended down 5 cents to $85.96 a barrel by 0640 GMT after gaining 0.9% on Monday, while WTI futures fell 3 cents to $81.60 a barrel after rising 1.1% a day earlier.
Both indices rose nearly 3% last week, marking two weeks of gains in a row.
As the world’s biggest oil consumer enters its peak summer consumption period, gasoline demand is rising and oil and fuel inventories are shrinking.
Surveys showed US crude inventories are expected to fall by 3 million barrels before June 21. Gasoline stocks are also likely to fall, while distillate stocks are likely to have risen last week.
The rise in oil prices was driven by an optimistic demand outlook and dwindling U.S. inventories. Demand is expected to continue to rise in the coming months as the Northern Hemisphere enters a hot summer and the approaching hurricane season.
Meanwhile, investors are wary that oil prices will be under pressure amid concerns that higher interest rates will constrain the economy and limit fuel consumption growth.
The release of the personal consumption expenditures index, the Fed’s preferred measure of price increases, is expected to provide more clues about the outlook for interest rates on Friday. Delays in the rate cut will keep borrowing costs high for longer.
Ukrainian attacks on Russian oil infrastructure, which could reduce crude and fuel supplies, are supporting prices.
The package approved by the European Union against Russia will add 27 ships, including those operated by the Russian state shipping company Sovcomflot, to the list of sanctioned entities.
In addition, the market remains tense ahead of this weekend’s elections in Iran, where a tougher leader could decide to engage in more confrontation with the U.S., Israel, and Saudi Arabia.
