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Brent crude gained 14 cents, or 0.2%, to $85.75 a barrel by 0917
GMT, while U.S. West Texas Intermediate rose 10 cents, or 0.1%,
to $81.63 a barrel.
Prices had risen about 2% on Tuesday amid optimism that the U.S.
Federal Reserve is getting closer to ending its cycle of
interest rate hikes, making dollar-priced oil cheaper for buyers
holding other currencies.
The U.S. consumer price index is expected to show March core
inflation rose 0.4% on a monthly basis and 5.6% year-on-year,
according to a Reuters poll of economists.
Philadelphia Federal Reserve Bank President Patrick Harker said
on Tuesday that he felt the U.S. central bank may soon be done
raising interest rates, while Minneapolis Federal Reserve Bank
President Neel Kashkari said he believed inflation, now at a
rate of 5% by the Fed's preferred measure, will get to "the
mid-threes" by the end of this year.
"With traders being wary of the potential for inflation data to
come in on the hotter side of expectations, it would not
surprise to see the current positive market sentiment take a
more circumspect turn ahead of key macro data this week," Kohle
Capital Markets analyst Tim Waterer said.
Meanwhile, data from the American Petroleum Institute (API)
showed crude inventories rose by about 380,000 barrels in the
week ended April 7, sources said, against forecasts from eight
analysts polled by Reuters for a decline of 600,000 barrels.
At the same time, gasoline inventories rose by about 450,000
barrels, according to the API report, while analysts had
expected a 1.6 million-barrel drawdown.
The U.S. government will release its stockpile data at 10:30
a.m. (1430 GMT) on Wednesday.
In another negative for oil demand, the International Monetary
Fund on Tuesday trimmed its 2023 global growth outlook, citing
the impact of higher interest rates.
The market also awaits clarity on oil demand and supply, with
monthly reports from the Organization of the Petroleum Exporting
Countries (OPEC) and the International Energy Agency due on
Thursday and Friday, respectively.
The U.S. Energy Information Administration on Tuesday cut its
forecast for oil production by OPEC countries by 0.5 million
barrels-per-day for the rest of 2023 and cut its 2023 world oil
demand growth forecast by 40,000 bpd.
(Additional reporting by Muyu Xu and Arathy Somasekhar; Editing
by Bernadette Baum)
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