Brent oil hovers above $80 as US inflation eases

Global oil benchmark Brent hovered above $80 a barrel on Thursday after U.S. inflation data implied interest rates in the world’s biggest economy are close to their peak.

Data released on Wednesday showed U.S. consumer prices rose modestly in June and registered their smallest annual increase in more than two years as inflation continued to subside.

Markets expect one more interest rate rise before the U.S. rate-hiking cycle peaks. Higher rates can slow economic growth and reduce oil demand.

Oil prices have rallied by around 12% in two weeks, primarily in response to supply cuts from top producers Saudi Arabia and Russia, said Craig Erlam, senior market analyst at OANDA.

“Some profit-taking at these levels wouldn’t be hugely surprising and may have come sooner if not for the U.S. consumer price inflation data,” he said.

Brent crude futures dipped 1 cent to $80.10 per barrel by 1315 GMT, while U.S. West Texas Intermediate crude futures crept 8 cents lower to $75.67.

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