Crude Oil Scores a Comeback After the CPI Pull‑Back
For folks watching the market feel a pinch, the latest data suggests the squeeze is easing. WTI crude kicked back to about $79.30 on Friday, bouncing off an eight‑week low. The reason? U.S. CPI slipped, making investors feel a little less doom‑laced.
Who’s Behind the Rally?
- Fed‑Cut Fever – Traders are buzzing over a 70 % chance the Federal Reserve will trim rates in September. Anything to keep the real‑rate stresses from choking the economy hits oil bright‑side.
- Inventory Shortfalls – The Energy Information Administration reports a jump‑start drop of 2.508 million barrels in crude stocks (vs. the expected 1.35 million). That’s a signal that supply might not keep pace with demand.
- Geopolitics & Forecasts – With Middle‑East tensions simmering, and IEA trimming outlook while OPEC sticks to its own numbers, the picture feels murky. But the Fed’s delay on a rate cut could buoy demand, at least for now.
The Dollar’s Downtrend & What It Means
The U.S. Dollar Index (DXY) has slipped below 105.00 following the CPI release. Traders see this as a cue that dollar selling could keep happening, especially as the Producer Price Index also stayed on a downtrend.
What’s in the Pipeline?
- OPEC is gearing up for a meeting next week, planning an external capacity audit.
- México has slashed its oil purchase prices for Gulf Coast refineries.
- IEA forecasts global consumption to rise by just 1.1 million barrels per day this year, a modest bump from the last month.
Outlook in a Nutshell
With inventory pulls outpacing expectations and the Fed holding its ground, oil could feel the pressure—especially if geopolitical events flare up. The Chancellor’s (Jerome Powell) confirmation of a delay in rate cuts suggests demand might stay flat until after summer, meaning WTI may struggle to surge past key support zones.
Bottom line: The market is giving oil a hopeful lift, but caution is still in the air. Keep an eye on inventory trends and Fed signals, and you’ll know when the next oil spark arrives.
