Oil Prices Hold at 1-Month High Ahead of US CPI Data

In today's import exports, world crude oil prices experienced little movement for the Asian session. Holding near a one-month high as the market awaits the latest cues from US inflation data to be announced today, with focus shifting to opportunities for potential increases in US crude oil.

Global crude rose on Tuesday amid growing hopes that the US Fed will ease its hawkish stance, while recent supply cuts by OPEC+ and its allies continued to provide support. API data showed that US crude inventories unexpectedly grew by about 300,000 barrels in the week to April 7. But this was also partly driven by a draw of about 1.6 million barrels from the strategic oil reserve. Government data due later in the day will also provide further clarity on supplies in the world's largest oil consumer, with analysts expecting a draw of 583,000 barrels. Oil stocks have fallen consistently over the past two weeks as improving weather conditions in the US boosted fuel demand. The prospect of tighter oil supplies, especially after the OPEC+ cuts, has kept the near-term outlook for the crude market optimistic. Brent crude futures rose about 0.1% to $85.67 a barrel. Meanwhile, WTI crude futures were still stagnant around $81.55 a barrel as of 01:25 GMT. Both contracts reportedly jumped 1.6% and 2.2% on Tuesday. The focus now is on the US CPI data due later in the day, which is expected to show further easing in inflation, albeit modestly. Meanwhile, the reading is still expected to be well above the Fed’s target range, raising hopes that the central bank is closer to raising interest rates. On the other hand, the market is also wary of further disruptions to oil demand, especially from slowing economic growth. Data from China showed that inflation grew less than expected in March, suggesting the economy is recovering despite the wobbles in the world’s largest oil importer. With a series of recent economic readings showing a sluggish recovery in China, the market is betting that the government is likely to roll out more stimulus measures to support economic growth. Also in focus this week are the monthly oil reports from OPEC and the International Energy Agency. Both groups expect a recovery in China to push oil demand to higher levels this year.

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