Commodity Capsule: Oil prices range-bound on Wednesday amid a firm dollar index and as the US industry group reported more of than expected build in crude stocks last week.
Weighing on the market was U.S. consumer inflation stayed elevated last month.
Investors now expect Fed policymakers to wait longer before cutting interest rates, potentially dampening economic growth and oil demand.
Brent futures hover at $82.70 a barrel. US WTI crude futures near $78 a barrel.
US crude oil inventories rose 8.52 million barrels in the week ended Feb. 9– American Petroleum Institute figures.
The build was much bigger than forecast of a 2.6 million barrel increase
Official data from the U.S. Energy Information Administration is due on Wednesday.
The dollar index surged to a three-month high past 104.60 level.
Most non-ferrous metals eased on Wednesday, weighed down by a stronger dollar.
Hotter-than-expected US inflation data dampened expectations for early interest rate cuts from the Federal Reserve.
Copper on the London Metal Exchange dropped under $8,200/metric ton.
The dollar traded near three-month highs against major peers as traders pushed back bets for the first Fed rate cut following strong US inflation figures overnight.
Federal funds futures currently price in no rate cut in March and lower than 50 per cent chance of easing in May.
Data on Tuesday showed US consumer prices increased more than expected in January.
Copper is down more than 4 per cent this month on concerns about manufacturing demand from China and its property sector in particular
Activity is muted this week as China celebrates the Lunar New Year.
Gold prices lingered near a two-month low on Wednesday, trading below the key $2,000-per-ounce level.
Stronger-than-expected US inflation report prompted traders to trim bets for deeper rate cuts by the Federal Reserve.
Global gold futures shed $30 in the overnight session to hover near $2,000/ounce, its lowest since Dec. 13.
Gold came under pressure after the U.S. inflation report showed consumer prices (CPI) rose more than expected in January, pushing back the projected timing of the first Fed rate cut as well as the number of cuts that were seen by year-end.
Data on Tuesday showed CPI rose 3.1 per cent on an annual basis, above forecasts for a 2.9 per cent increase.
Traders have lowered their bets from four quarter-point rate cuts for 2024, in line with the Fed’s “dot plot” released in December.
Fed is expected to wait until June before cutting interest rates.
The US dollar index hovered at a three-month peak, while 10-year Treasury yields were near a 2-1/2-month high.
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