Futures Movers: Oil prices mark first gain in 4 sessions as a modest slowdown in U.S. inflation helps weaken the dollar


Oil futures ended higher on Thursday for the first time in four sessions, as U.S. data revealed signs of easing inflation, prompting a pullback in the dollar and raising the potential for the Federal Reserve to scale back the size of its interest-rate hikes.

Prices for oil, however, remained lower for the week on concerns about Chinese demand and rising crude inventories.

Price action

West Texas Intermediate crude for December delivery


rose 64 cents, or nearly 0.8%, to settle at $86.47 a barrel on the New York Mercantile Exchange, holding onto a week-to-date decline of around 6.6%, according to FactSet data.

January Brent crude

the global benchmark, climbed $1.02, or 1.1%, to settle at $93.67 a barrel on ICE Futures Europe.

Back on Nymex, December gasoline 

prices rose nearly 0.9% to $2.5663 a gallon, while December heating oil  

declined by 2.4% to $3.5694 a gallon.

December natural gas

 rose 37 cents, or 6.4%, to $6.239 per million British thermal units, with prices posting their first gain in three sessions.

Market drivers

“Oil prices shook off China negativity after the CPI cooled,” Phil Flynn, senior market analyst at The Price Futures Group, told Market Watch.

Data Thursday showed the U.S. cost of living rose by a smaller-than-expected 0.4% in October. The yearly inflation rate fell to 7.7% from 8.2%, marking the lowest level since January.

After the CPI came in lower than expected, some of the “headwinds for oil, such as a stronger dollar and fears of Fed interest rate hikes being more aggressive, have eased,” said Flynn.

“At the same time there continues to be uncertainty about what’s going to happen with China regarding its COVID zero policy,” he said. “I think once we see any signs China is going to start to reopen its economy, [that] could dramatically change the dynamic and really push [oil] prices higher.”

Overall, however, crude prices have suffered this week as an increase in COVID-19 cases in China dampened hopes for a relaxation of Beijing’s “zero COVID” policy of lockdown restrictions, said Craig Erlam, senior market analyst at OANDA.

“While the narrative in recent weeks has focused on the potential for Chinese COVID restrictions to be relaxed, which has driven Chinese equities higher and lifted oil prices, the reality has seen case numbers soaring, restrictions reimposed and mass testing undertaken,” Erlam said.

Natural-gas futures, meanwhile, finished with a gain of more than 6% Thursday after posting back-to-back session losses.

The U.S. Energy Information Administration reported Thursday that domestic natural-gas supplies rose by 79 billion cubic feet for the week ended Nov. 4.

That was slightly lower than the average analyst forecast for an increase of 82 billion cubic feet, according to a survey conducted by S&P Global Commodity Insights.

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