Oil edges higher while US inflation accelerates

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Traders worry that US interest rate rises, a response to high inflation, will push up the dollar, undermining oil prices

Oil edged up on Wednesday, a day after it fell through $100 a barrel for the first time since April, while traders looked towards US inflation data that could weaken the market.

A further concern is that US interest rate rises in response to high inflation will push up the dollar, also undermining oil prices. Economists polled by Reuters expect the figures to show that US inflation has accelerated to 1.1% monthly and 8.8% annually. Oil is generally priced in US dollars, so a stronger greenback makes the commodity more expensive to holders of other currencies, putting downward pressure on demand and its dollar price.

 

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