Crude oil futures edged lower Tuesday as traders assessed the latest U.S. inflation data and what it may mean for the Federal Reserve’s decision making on interest rates this year.
The West Texas Intermediate contract for April shed 38 cents, or 0.49%, $77.55 a barrel. The Brent contract for May lost 36 cents, or 0.39%, to $81.89 a barrel.
The consumer price index for February increased 0.4% for the month and 3.2% from a year ago. Though the monthly gain was in line with expectations, the annual rate came in slightly ahead of the 3.1% forecast.
Federal Reserve 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.
Lower rates typically stimulate economic growth, which fuels crude demand.
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.
OPEC will also release its monthly oil market report Tuesday, which should provide more detail on where supply and demand for crude is heading this year.