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The West Texas Intermediate contract for April gained 31
cents, or 0.4%, $78.24 a barrel. The Brent contract for May added 26 cents, or
0.32%, to $82.47 a barrel.
OPEC held to its forecast for 2024, with oil demand expected
to grow by 2.2 million barrels per day, according to the cartel’s latest
report. Crude supply outside OPEC is expected to grow by 1.1 million bpd this
year, according to the report.
OPEC’s forecast implies an oil market deficit this year
unless the cartel and its allies unwind production cuts of 2.2 million barrels
per day. Those cuts will remain in place at least through the second quarter.
Inflation in the U.S., meanwhile, increased 0.4% in February
and 3.2% from a year ago, according to the latest reading of the consumer price
index. Though the monthly gain was in line with expectations, the annual rate
came in slightly ahead of the 3.1% forecast.
Traders are closely monitoring inflation in the U.S. for
signs of when the Federal Reserve will be in a position to cut interest rates.
Lower rates typically stimulate economic growth, which fuels crude demand.
Federal Chairman Jerome Powell told Congress last week that
the central bank is waiting for more data to indicate that inflation is moving
sustainably at 2% before cutting interest rates. The market is expecting the
central bank to implement the first rate cut in June.
WTI had taken a leg higher to $80 a barrel earlier in the
month, but has since pulled back on renewed worries about demand in China and
production in the Americas, particularly the U.S.
Prices at the pump have risen 9% since the start of the year
with gallon of regular gas averaging $3.39 a gallon as of Tuesday, according to
data from the motorist association AAA. Fuel prices typically rise as the
spring and summer drive season draws closer.