Oil Prices Edge Up as Markets Wait on US Inflation Report

Oil prices inched up as traders waited for Wednesday's US inflation report to gauge the Federal Reserve's next move. The Strait of Hormuz remained a concern, with Iran saying a deal with Oman on new shipping lanes was close but tied to US conditions.

Brent crude rose 0.9% to $84.32 a barrel and US crude gained 0.7% to $78.74 as the market reacted to the news. A hotter inflation reading could pull markets back toward a September rate hike, even though JPMorgan said a core print alone probably wouldn't be enough unless firmer readings near 0.3% start showing up repeatedly.

The implied chance of a September hike has cooled from 67% to about 44%, supporting bonds and stocks ahead of the data. Markets are reacting not just to the inflation number itself, but what it implies for interest rates and their path.