Crude prices close with increases; Brent exceeds 80 dollars per barrel

The Petroleum it topped $80 a barrel on Tuesday, posting its biggest daily rise in more than a month, as investors bought risky assets after US data pointed to slowing inflation.

The market was also buoyed by concerns about supply disruptions, including the shutdown of the pipeline Keystone between Canada and the United States after a mass leak last week.

The futures of Brent crude oil rose $2.69, or 3.45%, to $80.68 a barrel, while those of the US West Texas Intermediate (WTI) earned $2.22, or 3.3%, to $75.39.

They were the biggest gains since Nov. 4.

The dollar index fell after learning that the Underlying inflation of consumer prices in USA rose less than expected last month, reinforcing expectations that the Federal Reserve will slow the pace of interest rate hikes on Wednesday.

A weaker dollar makes oil cheaper for holders of other currencies, which may boost demand.

“Nobody really expected a below-expected number, a potential demand positive that would drive the market,” said Robert Yawger, an analyst at Mizuho.

However, traders say oil supply concerns have been around for several days, suggesting Tuesday’s rally may be due to a less risky sentiment following the inflation data.

“This is a broad-based, dollar-based rally,” said Eli Tesfaye, market strategist at RJO Futures. “Given the sustained decline in the market, any positive news will drive the price of oil higher, but whether these rallies will continue remains to be seen.”

Tuesday’s rally could also be due to traders closing out short positions – speculative bets that the price of a commodity will fall – after both benchmarks fell more than 10% last week.

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