Oil finds support as US inflation eases

Brent crude’s price inched up following the release of the latest softer-than-expected US inflation data for a second consecutive month.

IMAGE: US dollar bills. Getty Images

The US inflation rate, based on the Consumer Price Index (CPI), fell by 0.1% in March, after increasing by 0.2% in February, according to the US Bureau of Labor Statistics (BLS).

On an annual basis, the US CPI increased to 2.4% last month, down from the 2.8% growth seen in February.

Oil prices have reacted positively to the “relatively soft” inflation data. It opens the window for interest rate cuts by the US Federal Reserve (Fed) this year, as it tries to bring inflation under its 2% target, according to analysts.

Lower interest rates in the US can boost demand, making dollar-denominated commodities like oil cheaper for holders of other currencies.

By Aparupa Mazumder

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