Oil prices nudged higher in early Asia trade on Thursday as lower-than-expected U.S. inflation data relieved some concerns over rising interest rates.
By 11:39 a.m. Bangkok time, Brent oil futures rose to $80.45 per barrel, while West Texas Intermediate crude futures climbed by 0.37%, to $76.03 per barrel. In the last two sessions, both contracts gained almost $3, bringing them to levels not seen in nearly three months.
The oil market was also bolstered by the dollar’s 15-month lows due to soft inflation data.
While there was some upward movement, gains were limited as traders digested reports of an unexpected boost in U.S. crude inventory over the last week and other evidence signaling that gasoline demand was slowing despite the travel-heavy summer season.
In June 2023, the U.S. consumer price index rose 3% from a year ago, which was the lowest level since March 2021. Meanwhile, prices rose 0.2% in June from a month prior after gaining 0.1% in May. The reading was lower than Dow Jones estimates for 3.1% YoY increase and 0.3% MoM increase.
Bets that the Federal Reserve will need to adopt a less aggressive stance this year have been reinforced by the modest inflation number and after data signaling some cooling in the labor market.
