Crude Oil Futures Snap 3-Day Losing Streak, Settle Moderately Higher

Crude oil prices climbed higher on Thursday, rebounding after three straight days of losses, as the dollar fell after data showed a smaller than expected increase in U.S. consumer prices in October.

Oil’s uptick was limited due to concerns about the outlook for energy demand, as a surge in Covid cases in China’s Guangdong province raised fears that authorities might impose tough curbs in the area and several other parts of the country.

Data released by the Labor Department this morning showed the consumer price index rose by 0.4% in October, less than the expected increase of 0.6%. The annual rate of growth in consumer prices also slowed to 7.7% in October from 8.2% in September.

The annual rate of growth in core prices slowed to 6.3% in October from 6.6% in September, coming in below the expected 6.5% growth.

The dollar index fell to 108.19, losing ground amid rising hopes the Fed will start slowing down the pace of monetary tightening as early as next month.

West Texas Intermediate Crude oil futures for December ended higher by $0.64 or about 0.8% at $86.47 a barrel.

Brent crude futures were up $0.88 or 0.95% at $93.53 a barrel a little while ago.

Edward Moya, senior market analyst at OANDA, notes that the cool inflation report has brought hopes back to life that the U.S. economy could still have a soft landing.

Moya is of the view that the oil market is going to remain very tight this winter and this will keep oil prices heading higher.

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