LONDON: Oil prices rose on Wednesday, with benchmark Brent futures breaching $80 a barrel for the first time since May, after US inflation data spurred hopes the Federal Reserve may have fewer interest rate hikes in store for the world’s biggest economy.

US data showed consumer prices rose modestly in June and registered their smallest annual increase in more than two years. Markets expect one more interest rate rise, but oil traders hope that may be it. Higher rates can slow economic growth and reduce oil demand.

Brent futures rose 91 cents, or 1.2pc, to $80.33 a barrel by 1600 GMT, having risen by more than $1 earlier in the session. U.S. West Texas Intermediate (WTI) crude was up $1.08, or 1.4pc at $75.81 a barrel.

Oil prices also drew support from a weaker dollar and optimism surrounding Chinese stimulus, said Fiona Cincotta, senior financial markets analyst at City Index.

Forecasts from the US Energy Information Adm­­ini­­stration and the Inter­national Energy Agency (IEA) point to the market tightening into 2024.

Published in Dawn, July 13th, 2023