Brent moves lower ahead of US CPI data

The front-month ICE Brent contract has lost $0.71/bbl on the day, to trade at $80.80/bbl at 09.00 GMT.

PHOTO: Birdseye view of colourful oil barrels. Getty Images

Upward pressure:

Brent’s price has remained above $80/bbl, supported by oil demand growth during the winter season and supply risks from Russia amid stricter US sanctions.

The US Department of the Treasury has announced sweeping sanctions against Russia’s energy sector, targeting oil companies, tankers, insurers and traders, thereby raising oil supply concerns and supporting oil prices.

“These sanctions threaten global oil dynamics, particularly impacting countries like India and China, where 25% of Russian seaborne oil could face disruptions,” SPI Asset Management’s managing partner Stephen Innes said.

Brent’s price has found support from “a combination of strong winter-related demand… not least, the latest rounds of US sanctions on Russia’s oil industry, which went much further than expected,” Ole Hansen, head of commodity strategy at Saxo Bank said.

Downward pressure:

Brent crude shed the previous day’s gains ahead of US CPI data, which is scheduled to be out tomorrow.

Inflation rate in the US, measured by the change in the Consumer Price Index (CPI), is the key focus this week as markets await the US Federal Reserve's next steps on easing monetary policies in 2025.

Higher interest rates in the US can dampen demand for dollar-denominated commodities like oil, making it costlier for holders of other currencies.

“The mood in the broader financial markets remains downbeat, as investors continue to downgrade expectations of the Federal Reserve’s policy easing this year,” VANDA Insights’ founder and analyst Vandana Hari said.  

By Aparupa Mazumder

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