By Noah Browning
LONDON (Reuters) -Oil prices rose on Tuesday with support from a weaker dollar and hopes that the Federal Reserve might ease up on its policy tightening after a key U.S. inflation report this week, though concerns remain over Chinese demand .
Brent crude futures rose 65 cents, or 0.8%, to $84.83 a barrel by 1405 GMT. U.S. West Texas Intermediate futures rose 92 cents, or 1.2%, to $80.66 a barrel. Both benchmarks gained nearly $1 in earlier trading.
The dollar weakened on hopes 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.
A U.S. inflation report to be released on Wednesday is expected to help investors to gauge the near-term trajectory for interest rates.
“The short-term crude demand outlook will soon be clearer. This week we will find out if the U.S. economy is taking steps into the recession pool or if it is going to do a cannon ball into it,” said Edward Moya, senior analyst at OANDA.
“Wall Street should have a strong handle on the trajectory of the economy after it gets a pivotal inflation report.”
Data from China, however, showed consumer inflation in March rose at its slowest pace since September 2021, suggesting demand weakness persists in an uneven economic recovery.
“China’s March CPI is lower than expected, which may promote the Chinese government to further stimulate the economy,” said Tina Teng, an analyst at CMC Markets.
Oil futures have climbed more than 5% since the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia surprised the market last week with further cuts to production targets from May.
In France, the restart of the last of the four domestic refineries shuttered by a month-long strike signalled a likely boost to demand for oil.
On the U.S. supply front, industry data on U.S. crude stockpiles is due on Tuesday. The average estimate from five analysts polled by Reuters was that crude inventories fell by about 1.3 million barrels in the week to April 7.
(Reporting by Noah BrowningAdditional reporting by Sudarshan Varadhan, Stephanie Kelly and Trixie YapEditing by Jason Neely and David Goodman)
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