Oil rises to over $80 a barrel on Tuesday. It recorded its biggest daily gains in over a month. As investors bought up risk assets after U.S., data pointed to slowing inflation.
The market was also buoyed by concerns about supply disruptions. It includes the ongoing shutdown of the Canada-to-United States Keystone crude pipeline. This was due to the following massive leak last week.
Brent crude futures settled at $80.68 per barrel, up $2.69, or 3.5%. U.S. West Texas Intermediate (WTI) crude futures settled at $75.39 per barrel, up by $2.22, or 3%. Both contracts recorded their biggest daily gains since Nov. 4.
The dollar index plunged on Tuesday after data showed that underlying U.S. consumer price inflation rose less than expected last month, reinforcing expectations that the Federal Reserve will slow the pace of its interest rate increases on Wednesday.
A weaker dollar makes oil cheaper for holders of other currencies, which can boost demand.
“Nobody really saw that number coming in below expectations – a possible demand-positive event that put a bid in the market,” Mizuho analyst Robert Yawger said.
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