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Brent and West Texas crude oil prices down on U.S. inflation data

By: Franyi Sarmiento, Ph.D., Inspenet, August 11, 2022

Brent and West Texas Intermediate oil prices reported declines, awaiting data on inflation in the US and the possible resumption of flow in the Druzhba pipeline.

Brent crude oil futures, the benchmark in Europe, fell 1.69 dollars, or 1.75%, to reach a value of 94.64 dollars a barrel. Meanwhile, on the New York Stock Exchange, West Texas Intermediate oil fell 1.61 dollars, or 1.78%, to reach a price of 88.89 dollars.

The drop followed the announcement by Russia’s Transneft on the resumption of oil pumping through the southern branch of the Druzhba pipeline in the afternoon hours in Moscow.

Previously, Ukraine suspended Russian pipeline flows to parts of central Europe because Western sanctions prevented it from receiving transit fees from Moscow, the company said. Now, the Hungarian energy group MOL transferred the transit fee for the use of the Ukrainian section of the pipeline.

Meanwhile, investors are awaiting data on the U.S. Consumer Price Index (CPI) to look for signals on how strongly the Federal Reserve will raise interest rates in the coming months. If underlying inflationary pressures remain elevated, the Federal Reserve is likely to adopt another large interest rate hike in September, which could dampen economic activity and fuel demand.

This material from was edited for clarity, style and length.


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