Crude oil prices pulled back on Thursday as investors digested fresh U.S. Consumer Price Index data, tempering near-term demand projections despite persistent Middle East geopolitical risk premiums.
U.S. West Texas Intermediate crude fell 0.83% to $82.58 a barrel, while Brent crude dropped 0.71% to $88.35 per barrel.
Official U.S. Labor Department data showed headline consumer inflation slowed to 3.4% year-over-year in July, while core inflation, which excludes volatile food and energy costs, moderated to 2.5%.
“This CPI report gives the market and the Fed the chance to take a big sigh of relief,” said Adam Sarhan, chief executive officer at 50 Park Investments, following the inflation release.
The latest U.S. inflation metrics cooled expectations of aggressive Federal Reserve interest rate hikes, reassuring energy traders who feared higher borrowing costs could further dampen global macroeconomic consumption.
The price pullback follows recent demand forecast reductions from OPEC and the International Energy Agency, which lowered global oil demand growth expectations amid softer industrial consumption metrics.
However, crude prices remain elevated as ongoing shipping disruptions through the Strait of Hormuz and broader Middle East supply uncertainties continue to maintain a firm structural price floor.
