Oil Prices Weigh on Investors as Australian Sharemarket Seeks Gains

The Australian sharemarket is set to rise today, with futures pointing to a gain of 15 points, or 0.2 per cent, at the open. This comes after the ASX shed 1 per cent on Tuesday.

However, investors are still feeling pressure from rising oil prices. A barrel of Brent crude briefly climbed as high as $US99.46 before giving back most of its gain and currently trading up 0.1 per cent at $US97.05. The price has jumped from roughly $US72 since early July due to increased fighting in the Middle East.

The higher oil prices have exacerbated concerns about inflation, which could lead to a rate hike by the Federal Reserve next week. Economists expect the US government's August report for inflation at the wholesale level to show an acceleration to 5.4 per cent from 4.7 per cent in July, while the more closely watched report on consumer price inflation is expected to ease slightly to 3.3 per cent from July's 3.4 per cent.

President Donald Trump has been lobbying for lower interest rates, which could give the economy and inflation an extra kick. The Fed's new chairman, Kevin Warsh, has said he wants to give financial markets fewer clues about what the Fed plans to do with interest rates in the short term.