CHENNAI, April 11 (Reuters) – Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in US crude stockpiles.
Brent crude futures rose 64 cents, or 0.8%, to UDS 84.82 a barrel at 0557 GMT, while US West Texas Intermediate futures gained 67 cents, or 0.8%, to USD 80.41 a barrel.
Data from China showed that consumer inflation in March hit the slowest pace since September 2021, suggesting demand weakness persists amid an uneven economic recovery, which spurred expectations Beijing may take steps to boost growth.
“China’s March CPI is lower than expected, which may promote the Chinese government to further stimulate the economy,” said Tina Teng, an analyst at CMC Markets.
Crude futures also climbed as the dollar eased on expectations that the US Federal Reserve is getting closer to ending its rate hike cycle. A weaker greenback makes oil cheaper for those holding other currencies.
“With more central banks pausing rate hikes, such as the Reserve Bank of Australia, Bank of Korea … the expectation for the Fed to further scale back its tightening policy has been strengthened,” Teng said.
Signs of strong fuel demand in India, the world’s third-biggest oil consumer, in March also supported prices.
Last month, fuel consumption jumped by 5% from a year earlier to a record 4.83 million barrels per day.
Oil futures have climbed more than 5% since the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia surprised the market last week with a new round of production cuts starting in May.
On the US upply front, industry data on US crude stockpiles is due on Tuesday. Five analysts polled by Reuters estimated on average that crude inventories fell by about 1.3 million barrels in the week to April 7.
A US inflation report to be released on Wednesday could help investors gauge the near-term trajectory for interest rates.
(Reporting by Sudarshan Varadhan in CHENNAI; Additional reporting by Stephanie Kelly and Trixie Yap; Editing by Christian Schmollinger and Sonali Paul)
This article originally appeared on reuters.com