# Oil rises about 2% with U.S. and China inflation in focus Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-04-12 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Oil Prices Rise 2% on Federal Reserve Policy Hope Meta Description: Discover how oil prices surged amid optimism about Fed policy changes and lingering worries over Chinese demand. Stay informed with the latest updates. URL: https://financedigest.com/oil-rises-about-2-with-u-s-and-china-inflation-in-focushtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-04-11t002144z1lynxmpej3a00crtroptp4global-oil-1736814169821-compressed.jpg) By Stephanie Kelly NEW YORK (Reuters) – Oil prices rose about 2% on Tuesday on hopes that the Federal Reserve might ease up on its policy tightening after a key U.S. [inflation report this week](https://www.financedigest.com/dollar-dips-ahead-of-inflation-data-later-this-week.html "Dollar dips ahead of inflation data later this week"), though concerns remain over Chinese demand. Brent crude futures settled up $1.43, or 1.7%, to $85.61 a barrel. U.S. West Texas Intermediate futures rose $1.79, or 2.2%, to $81.53 a barrel. Investors were more optimistic that the U.S. Federal Reserve is getting closer to [ending its cycle](https://www.financedigest.com/european-shares-rise-as-us-inflation-data-signals-end-of-rate-hike-cycle.html "European shares rise as US inflation data signals end of rate-hike cycle") of interest rate hikes, making dollar-priced oil cheaper for buyers holding other currencies. The prospect of the Fed raising its benchmark interest rate only once more and in a 25 basis point increment is a useful starting point but the central [bank’s policy path will depend](https://www.financedigest.com/seven-out-of-ten-uk-adults-aged-25-44-never-seek-advice-on-dealing-with-debts-despite-depending-on-the-bank-of-mum-and-dad.html "Seven out of ten UK adults aged 25-44 never seek advice on dealing with debts despite depending on the bank of mum and dad") on incoming data, New York Fed President John Williams said on Tuesday. A U.S. [inflation report to be released on Wednesday is expected to help investors gauge the near-term trajectory for interest rates](https://www.financedigest.com/hotel-investors-should-they-be-worried-about-a-potential-economic-pause-delving-into-inflation-interest-rates-recession-etc.html "‘Hotel Investors – should they be worried about a potential economic pause?’ delving into inflation, interest rates, recession etc"). The short-term crude [demand outlook](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook") will soon be clearer. This week we will find out if the U.S. [economy is taking steps](https://www.financedigest.com/china-steps-up-easing-cuts-lending-benchmarks-to-revive-faltering-economy.html "China steps up easing, cuts lending benchmarks to revive faltering economy") into the recession pool or if it is going to do a cannonball into it,” said Edward Moya, senior analyst at OANDA. Data from China, however, showed consumer inflation in [March rose at its slowest pace](https://www.financedigest.com/uk-recruiters-slow-pace-of-pay-growth-in-march-rec-survey-shows.html "UK recruiters slow pace of pay growth in March, REC survey shows") since September 2021, suggesting demand weakness persists in an uneven economic recovery. China’s March CPI is [lower than expected](https://www.financedigest.com/commerzbank-keeps-outlook-as-lower-q3-profit-still-beats-expectations.html "Commerzbank keeps outlook as lower Q3 profit still beats expectations"), which may promote the Chinese government to further stimulate the economy,” said Tina Teng, an analyst at CMC Markets. Oil futures have climbed around 7% since the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia surprised the market last [week with further cuts](https://www.financedigest.com/meta-plans-to-cut-thousands-of-jobs-as-soon-as-this-week-bloomberg-news.html "Meta plans to cut thousands of jobs as soon as this week – Bloomberg News") to production targets from May. OPEC [output will fall](https://www.financedigest.com/japans-factory-output-posts-biggest-fall-in-8-months-on-weak-autos-chips-sectors.html "Japan’s factory output posts biggest fall in 8 months on weak autos, chips sectors") by 500,000 bpd in 2023, then rise by 1 million bpd in 2024, after the group’s output agreement expires, the Energy Information Administration forecast on Tuesday. Total non-OPEC liquid fuels [production is expected](https://www.financedigest.com/oil-rises-on-saudi-oil-production-expectations.html "Oil rises on Saudi oil production expectations") to grow by 1.9 million barrels per day (bpd) in 2023 and by 1 million bpd in 2024, the EIA said. In France, the restart of the last of the four domestic refineries shuttered by a month-long strike signaled a likely boost to [demand for oil](https://www.financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-high.html "Oil gains after IEA sees demand rising to record high"). On the U.S. supply front, [industry data](https://www.financedigest.com/how-occupancy-data-can-support-the-banking-industry-in-challenging-times.html "How occupancy data can support the banking industry in challenging times") on U.S. crude stockpiles was due on Tuesday. The average estimate from five analysts [polled by Reuters](https://www.financedigest.com/bank-of-england-to-raise-rates-by-50bps-again-to-tame-inflation-reuters-poll.html "Bank of England to raise rates by 50bps again to tame inflation: Reuters Poll") was that crude inventories fell by about 1.3 million barrels in the week to April 7. (Reporting by Stephanie Kelly; [Additional reporting by Noah Browning](https://www.financedigest.com/tailify-bolsters-leadership-team-with-addition-of-julia-burton-brown-as-commercial-director.html "Tailify bolsters leadership team with addition of Julia Burton Brown as Commercial Director"), Sudarshan Varadhan and Trixie Yap; Editing by David Goodman, David Holmes and Mark Heinrich) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---