Crude oil futures declined on Thursday (April 11), as inflation concerns overshadowed fears of a potential Iranian attack on Israel at this time.

By the close of trading on April 11, WTI crude oil futures fell by $1.19 (or 1.38%) to $85.02 per barrel. Brent crude futures dropped 74 cents (or 0.82%) to $89.74 per barrel.

Oil prices had risen more than 1% on April 10 after Bloomberg News reported that the U.S. and allies believed an Iranian attack on Israel was imminent. Tehran had threatened to retaliate against Israel for attacking its consulate in Damascus, Syria.

However, the geopolitical risks that had previously driven oil prices up eased on Thursday as the anticipated attack did not materialize, according to Phil Flynn, Senior Market Analyst at Price Futures Group.

WTI and Brent crude oil prices fell 1.8% and 1.4% respectively this week, as the recent upward momentum driven by geopolitical tensions subsided somewhat.

The decline in crude oil futures on Thursday was also influenced by inflation concerns following a hotter-than-expected Consumer Price Index (CPI) report for March. The March Producer Price Index (PPI) report, released on April 11, was below forecasts, but showed a 2.1% increase compared to the same period last year, marking the strongest rise since April 2023.

‘The move in oil prices today is largely due to inflation risks, which could potentially dampen demand,’ said Mr. Raj.

According to the CME FedWatch tool, the U.S. Federal Reserve is now expected to start lowering interest rates in September, much later than initially forecast, with only two rate cuts projected for this year.

Lower interest rates generally stimulate economic growth and boost crude oil demand. Persistent inflation also raises doubts about whether the U.S. economy can achieve a soft landing this year.

Source: Vietstock