Oil prices experienced an increase on Tuesday, continuing the recent upward trend before the weekly U.S. crude stocks report by the American Petroleum Institute (API) and an important U.S. inflation announcement. By 09:15 E.T., U.S. crude futures rose 0.9% to $80.43 a barrel, and the Brent contract increased by 0.5% to $84.62 a barrel.
Anticipated Fall in U.S. Crude Stockpiles
The API is set to release its weekly data on U.S. crude stockpiles later in the day, expecting another decrease following last week's drop of over 4 million barrels. The API's report is a precursor to the official inventory data from the U.S. Energy Information Administration (EIA) due on Wednesday.
March U.S. CPI and Federal Reserve's Rate-Hike Cycle
This week, the March U.S. consumer price index (CPI) is also expected. If the CPI indicates a slowdown in inflation, it could persuade the Federal Reserve to pause its rate-hike cycle. A pause would benefit the crude market by stimulating economic activity in the world's largest economy and weakening the dollar, making oil more affordable for those using other currencies.
OPEC+ Output Slash and Demand Growth in Asia
The market has enjoyed a rally over the last three weeks, with prices increasing approximately 20%, aided by OPEC+'s unexpected decision to cut output starting in May. Additionally, signs of demand growth in Asia have improved market sentiment. Fuel consumption in India, the world's third-largest oil consumer, rose by 5% in March compared to the previous year.
Chinese Airlines Hiring and Rebound in Travel Demand
Reuters reported that Chinese airlines have begun hiring in significant numbers, preparing for an anticipated rebound in travel demand this year following the relaxation of the country's anti-COVID restrictions. Speculators have increased their bullish bets on higher oil prices after the OPEC+ decision, resulting in the second-largest increase last week.
Upcoming OPEC and IEA Monthly Oil Market Reports
The monthly oil market reports from OPEC and the International Energy Agency (IEA) are due on Thursday and Friday, respectively. Both organizations anticipate a recovery in China, driving oil demand to record highs this year.