The oil market saw a decline in prices after two consecutive sessions of strong gains, as traders awaited the release of U.S. inflation figures that could impact the Federal Reserve's decision on interest rates. The Brent crude price dropped by 0.9% to $76.33, while the U.S. West Texas Intermediate (WTI) crude fell by 0.9% to $72.47. The previous trading session had seen both contracts settle more than 2% higher. Suvro Sarkar, lead energy analyst at DBS Bank, stated that with net long positions decreasing sharply over the past two weeks, many traders have already exited the market, leading to low volumes.
The U.S. consumer price index (CPI) figures for April are set to be released on Wednesday. Despite the slight decrease in inflation expectations by U.S. consumers in a report from the New York Federal Reserve, the Federal Reserve remains focused on combatting sustained high inflation. Prices had risen on Friday and Monday due to the easing of recession fears in the U.S. and traders viewing the three-week slide in crude demand as overdone. The recent state of emergency declared in Alberta, Canada, in response to wildfires that have led to the displacement of nearly 30,000 people and the shutting down of at least 280,000 barrels of oil equivalent per day, which is over 3% of Canada's output, also supported prices.
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