The interest rate cut, which aims to support a stalled recovery from the pandemic in the world’s second-largest economy and largest importer of crude, is likely to increase demand for oil.
On the other hand, the annual inflation rate in America continued to decline, during last May, for the eleventh month in a row, to record its lowest level in more than two years, which may reinforce the tendency of the US Federal Reserve, which meets today and tomorrow, to fix interest rates for the first time since March 2022. .
And data from the Bureau of Labor Statistics, released on Tuesday, showed that the annual inflation rate in America fell to 4 percent in May, compared to 4.9 percent in April, which was better than expectations of a decline to only 4.1 percent.
On a monthly basis, the consumer price index rose 0.1% in May, in line with expectations, after rising 0.4% in April.
On Monday, prices fell about 4 percent, due in part to concerns about the Chinese economy, after disappointing economic data last week.
“The market is showing a recovery since yesterday,” said Phil Flynn, an analyst at Price Futures Group.
The increase in global supplies, and concerns about the growth of market demand, affects ahead of the US Federal Reserve meeting on monetary policy, which ends Wednesday.
Most observers expect the US central bank to keep interest rates unchanged, especially after inflation data showed in America.
The rate hikes boost the dollar’s strength, making commodities denominated in it more expensive for holders of other currencies and weighing on prices.
The Organization of the Petroleum Exporting Countries (OPEC) kept its forecast for global oil demand growth in 2023 unchanged for the fourth month on Tuesday, slightly increasing expectations of demand growth in China.
price movements
Brent crude futures jumped $2.58, or 3.59%, to $74.41 a barrel by 16:50 GMT, and Nymex crude rose $2.47, or 3.69%, to $69.59 a barrel.
#Oil #jumps #decline #inflation #Chinas #rate #cut