Oil Prices Edge Up as Markets Await Wednesday's US Inflation Report
Oil prices rose slightly as traders awaited Wednesday's US inflation report, which could impact the Federal Reserve's next move. Brent crude increased by 0.9% to $84.32 a barrel, while US crude gained 0.7% to $78.74, according to Reuters.
The Strait of Hormuz remained a concern for oil prices, as Iran said a deal with Oman on new shipping lanes was close but still tied to US conditions, keeping flows thin. This matters because energy prices can influence inflation, and the July headline CPI is expected to rise 0.1%, while core CPI (excluding food and energy) may increase 0.2%. A hotter reading could shift markets back towards a September rate hike.
JPMorgan, a major US bank, believes that a roughly 0.22% core print alone probably wouldn't be enough to justify a hike unless firmer readings near 0.3% start showing up repeatedly. The implied chance of a September hike has cooled from 67% to about 44% due to the softer US jobs report, supporting bonds and stocks.