Oil closes 2% higher on US inflation, inventories data

Oil drilling rigs

Oil prices rose today, April 12, after data indicated a rise in US inventories and as inflation ticked down in the United States.

The Energy Information Administration (EIA) said that oil inventories rose by 600,000 barrels in the week ended April 7, compared to expectations for a decline of 1.3 million barrels.

Gasoline inventories in the US fell by about 300,000 barrels last week, distillate stocks fell by 600,000 barrels, and strategic crude reserves fell by 1.6 million barrels, as part of the sale of 26 million barrels authorized by the Congress.

EIA data also showed that crude oil exports fell by more than 2.5 million barrels per day to reach 2.7 million barrels per day, marking the largest ever decline.

Robert Yawger, Managing Director and Energy Futures Strategist of Mizuho Americas, said that inflation data indicates to some extent that the Federal Reserve will start cutting interest rates by the end of the year, and this is a positive development in energy demand, Reuters reported.

Brent crude futures contracts for June delivery increased by 2%, or $1.72, to $87.33 a barrel.

WTI crude for May delivery rose by 2.1%, or $1.73, to record $83.26 per barrel.