# Oil ticks up as U.S. inflation cools, but prices set for monthly drop
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-03-31
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Oil Prices Tick Up Despite Signs of Slowing Inflation -
Meta Description: Recent U.S. inflation data hints at easing price rises, boosting oil prices. Brent at $79.49/bbl and WTI at $74.82/bbl. OPEC likely to maintain output deal.
URL: https://financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drophtml

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By Shadia Nasralla

LONDON (Reuters) -Oil prices ticked up on Friday with U.S. [inflation data](https://www.financedigest.com/oil-jumps-on-lower-than-expected-us-inflation-data.html "Oil jumps on lower-than-expected US inflation data") showing some signs of slowing price rises, but on the month oil was on course for its weakest performance since November.

Brent futures, which have risen nearly 6% this week, were up 22 cents or 0.3% at $79.49 a barrel by 1309 GMT. West Texas Intermediate (WTI) U.S. crude was up 45 cents or 0.6% to $74.82, having gained about 8% so far this week.

But the contracts were set for 5% and 3% monthly drops respectively after hitting their lowest since 2021 earlier in the month in the wake of large [bank failures](https://www.financedigest.com/market-stress-indicators-react-sharply-after-u-s-bank-failures.html "Market stress indicators react sharply after U.S. bank failures").

Oil prices have broadly recouped these losses as worries about a global banking [crisis](https://www.financedigest.com/how-the-2023-banking-crisis-unfolded.html "How the 2023 banking crisis unfolded") have abated after banks in the U.S. and [Europe were rescued](https://www.financedigest.com/after-rescue-by-open-arms-99-migrants-wait-to-dock-in-europe.html "After rescue by Open Arms, 99 migrants wait to dock in Europe").

The U.S. Personal Consumption Expenditure (PCE) index, which is the Fed’s preferred inflation gauge, rose 0.3% in February on a monthly basis, compared with a 0.6% rise in January and an expectation of a 0.4% rise in a [Reuters poll](https://www.financedigest.com/germany-home-prices-to-sink-nearly-6-this-year-reuters-poll.html "Germany home prices to sink nearly 6% this year – Reuters Poll").

On an annual basis the gauge stood at 4.6%, below an expected 4.7%. While the inflation data showed signs of cooling, it remained elevated, which could lead to the Federal Reserve raising interest rates one more [time this year](https://www.financedigest.com/30-years-of-excel-lence-time-to-move-on.html "30 YEARS OF EXCEL-LENCE: TIME TO MOVE ON?").

Oil [prices were buoyed after producers shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern](https://www.financedigest.com/4-for-the-price-of-1-what-you-can-buy-in-the-uks-top-northern-cities-for-the-price-of-a-london-pad.html "4 for the price of 1: What you can buy in the UK’s top northern cities for the price of a London pad") Iraq following a halt to the northern export pipeline.

Also [sending a bullish signal was data](https://www.financedigest.com/stocks-dollar-little-changed-as-inflation-data-sends-mixed-signals.html "Stocks, dollar little changed as inflation data sends mixed signals") showing U.S. [crude oil](https://www.financedigest.com/oil-near-flat-as-us-crude-stock-draw-contends-with-economic-concerns.html "Oil near flat as US crude stock draw contends with economic concerns") stockpiles fell to a two-year low. \[EIA/S\]

Prices have also found support from a [rise in China’s](https://www.financedigest.com/oil-rises-about-2-with-u-s-and-china-inflation-in-focus.html "Oil rises about 2% with U.S. and China inflation in focus") manufacturing activity in March.

With [oil prices](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook") recovering from recent lows, the Organization of the Petroleum Exporting Countries and allies led by Russia are likely to stick to their existing output deal at a meeting on Monday, sources said.

OPEC [pumped 28.90 million](https://www.financedigest.com/sse-to-invest-122-million-in-scottish-pumped-hydro-project.html "SSE to invest 2 million in Scottish pumped hydro project") barrels per day (bpd) this month, a Reuters survey found, down 70,000 bpd from February. Output is down more than 700,000 bpd from September.

(Additional reporting by Sudarshan Varadhan and Andrew Hayley; Editing by Mark Potter, Jason Neely and Jan Harvey)


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