Oil prices slump following U.S. inflation reading
Investing.com — Oil prices slumped on Tuesday, as traders fretted over the diminishing prospect of an impending pivot in Federal Reserve interest rate policy early next year.
The inflation data added to pre-existing worries over excess supply and sluggish demand that were only somewhat offset by the impact of an attack on a commercial chemical tanker by Iran-aligned Houthis.
By 10:49 ET, Brent oil futures expiring in February had slipped by 2.9% to $73.81 a barrel, paring back some losses after temporarily touching its lowest mark since June. Meanwhile, West Texas Intermediate crude futures had fallen by 3.0% to $69.40 per 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.
Overall, the near-term outlook for oil remains dour, particularly with global monetary conditions likely to
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