Oil moves lower following US inflation data

Crude oil prices dipped following the release of the latest hotter-than-expected US inflation data.

PHOTO: Getty Images

The US inflation rate, based on the Consumer Price Index (CPI), rose by 0.5% in January, edging up from the 0.4% increase recorded in the previous month, according to the US Bureau of Labor Statistics (BLS).

On an annual basis, the US CPI inched higher from 2.9% in December to 3% last month, surpassing the market’s expectations.

The annual core inflation, which excludes food and energy prices, came in at 3.3%, while economists expected it to “stick around 3.2% YoY [year-on-year],” SPI Asset Management managing partner Stephen Innes remarked.

The latest inflation data follows closely the US Federal Reserve (Fed) chairman Jerome Powell’s remarks that he is not considering any immediate interest rate cuts, as the US central bank tries to bring inflation under its 2% target.

Higher interest rates can dampen global oil demand as it makes dollar-denominated commodities like oil costlier for holders of other currencies.

By Aparupa Mazumder

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