Crude oil futures were flat Thursday, holding most of their recent gains after subdued U.S. inflation data. A break in the war of words between the U.S. and Iran allowed traders a chance to catch their breath after oils strong rally earlier in the week. WTI light sweet crude oil was down 5 cents at $ 71.07 a barrel at last check.
Including food and energy prices, core consumer prices inched up by 0.1 percent in April after rising by 0.2 percent in the previous month. Core prices had been expected to rise by 0.2 percent. Michael Pearce, Senior U.S. Economist at Capital Economics, said the smaller than expected increase in core prices suggests that the recent surge in underlying inflation is fading. The Fed will likely raise interest rates, but at a slower pace than some most analysts have come to expect.
The U.S. Energy Information Agency (EIA) said on Thursday that the prices of crude oil and gasoline will increase this year. EIAs May Short-Term Energy Outlook (STEO) forecast that Brent crude oil prices will average 71 U.S. dollars per barrel in 2018, or 7 dollars per barrel higher than last months STEO. Correspondingly, EIAs forecast for regular gasoline retail prices increased to an average of 2.79 dollars per gallon in 2018, or 0.15 dollar per gallon higher than in last months STEO.
EIA estimated that global oil inventories fell an average of nearly 0.6 million barrels per day in each of the past five quarters (January 2017 through March 2018). Oil inventories for countries within the Organization for Economic Cooperation and Development (OECD) at the end of April were an estimated 3 percent lower than the previous five-year average (2013-2017) in terms of days of supply, the largest percentage below the five-year average since March 2014.