US West Texas Intermediate crude prices sour 3.3% as inflation fears flock markets

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US West Texas Intermediate crude prices sour 3.3% as inflation fears flock markets

On Wednesday, US and UK crude oil futures’ prices had been hit with a withering whiplash of more than 2.5 per cent as both benchmarks had beaten a hasty retreat amid a number of nettlesome niggles over key fundamentals including remarks from the US President Joe Biden who was quoted saying in an ‘Infrastructure Bill’-associated speech late in the day that his administration was exploring feasible options to downsize energy costs in the face of a ludicrously fustigating upsurge in inflation indicators, eventually prompting a broad-based sell-off wave late in the session.

On top of that, US CPI (Consumer Price Index) data released earlier in the day had unveiled that the labor department’s closely monitored inflation indicator had soared by the steepest pace in 31 years last month, jumping at an annual rate of 6.2 per cent while prompting a mass-scale sell-off breeze for riskier assets amid growing likelihoods that the US Fed might adopt a hawkish monetary policy in order to address a grudging inflation-surge.

Aside from that, the US Energy Information Administration (EIA) had told earlier in the session that US crude stockpiles added 1 million barrels last week, missing an analysts’ estimate of an increase of 2.1 million barrels while catalyzing a modest rally earlier in the day.

Oil prices wobble as White House focuses on trimming energy costs

Citing statistics, in the day’s commodity market wind-down, US WTI crude oil futures’ prices plunged as much as 3.3 per cent to $81.34 per barrel after hitting an intra-session high of $84.97 a barrel, marginally shy of a seven-year peak breached in recent past, while UK crude contracts’ prices curbed 2.5 per cent to $82.64 a barrel after hitting $85.50 per barrel earlier in the day.

Meanwhile, addressing to a persistent political pressure on Biden Administration to yield a downward spiral in key inflation indicators, a senior analyst at Price Futures Group, Phil Flynn said, “There's, no doubt, more pressure on the administration after the inflation reading numbers today.

There’s a growing concern the Fed may have to go back to acting more aggressively on a rate increase, so that’s given the dollar a rally.