Oil up, ignoring dismal stockpiles data to focus on less-aggressive Fed
Investing.com — It’s one thing to run ahead of the pack. It’s another to do so with blinkers on, as oil bulls demonstrated Wednesday, charging into higher territory by ignoring bearish U.S. inventory data and a Fed official’s caution that cooling inflation did not mean the central bank was ready to stop rate hikes.
New York-based West Texas Intermediate, or WTI, crude settled up 92 cents, or 1.2%, at $75.75 per barrel. WTI earlier hit $76.08, its highest since April. The U.S. crude benchmark is up 2.6% on the week, extending last week’s 4.6% rally.
London-based Brent gained 71 cents, or 0.9%, to finish the New York session at $80.11, after a near three-month high of $80.49. For the week, Brent is up 2% after last week’s 4.8% rally.
Oil’s latest run-up came after the Labor Department reported that the U.S. Consumer Price Index grew by just 3.0% in the year to June, expanding at its slowest pace in more than two years. Annual CPI was at 4.0% in May.
Even so, core CPI, measured by excluding volatile food and energy prices, rose 0.2% for May and was still up 4.8% from a year ago — more than double the Fed’s 2% target. That was an indication that while price pressures had eased in general, consumers were probably paying more than they should for everything, from what they stock in their refrigerator to what they put in the tank of their cars.
“Inflation is still too high,” Tom Barkin, Fed president for the region of Richmond, said at an event that began just after the release of the CPI data. “The demand seems to be settling down, but [the Fed] still looking to be convinced that will feed through to inflation. Demand remains elevated at the same time supply is constrained, the process of getting back to balance has been
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