July 16, 2024

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Oil prices slump to settle lower following US inflation reading

1 min read

Oil prices settled lower on Tuesday, as traders fretted over the demand outlook following the diminishing prospect of an impending pivot in Federal Reserve interest rate policy early next year.

By 14:30 ET, the West Texas Intermediate crude futures had fallen by 3.8% to $68.61 per barrel. The Brent oil futures expiring in February had slipped by 3.5% to $73.35 a barrel.

Annual headline consumer price growth edged down to 3.1% last month, decelerating from 3.2% in October, according to data from the Bureau of Labor Statistics on Tuesday. Month-on-month, the reading inched up by 0.1%. Economists had forecast the measures at 3.1% and 0.0%, respectively.

The closely-watched “core” figure, which strips out volatile items like food and energy, rose by 4.0% annually, in line with the prior month. On a monthly basis, underlying price gains came in at 0.3%, a marginally faster pace than 0.2% in October. Both matched estimates.

The numbers threatened to exacerbate fears that Fed policymakers may leave interest rates at high levels for a longer than anticipated period of time, a trend that could eat away at demand in the world’s biggest fuel consumer.

Also darkening the demand picture was data over the weekend which showed that top oil importer China slipped further into deflation in November, raising more concerns over slowing economic activity in the country.

Source: Oil prices slump to settle lower following US inflation reading (msn.com)

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