Crude oil futures booked a second consecutive monthly gain as OPEC+ is expected to extend its production cuts and the latest inflation data was in line with forecasts.
Crude futures largely held steady after a report from the Commerce Department showed inflation rose in line with expectations in January.
The West Texas Intermediate contract for April lost 28 cents, or 0.36%, to settle at $78.26 a barrel. The April Brent contract, which expires Thursday, fell 6 cents or 0.07% to settle at $83.62 a barrel.
The personal consumption expenditures price index rose 0.4% for the month and 2.8% from a year ago. The PCE index is the inflation gauge the Federal Reserve uses when deliberating on interest rates.
We've got the news you need to know to start your day. Sign up for the First & 4Most morning newsletter — delivered to your inbox daily. >Sign up here.
Traders' bets on when the Fed will cut interest rates were little changed, with the market expecting the first cut to come in June.
U.S. and Brent gained 3% and 2.3%, respectively, for February, with first month contracts trading at a premium to later months. A premium for immediate versus later delivery typically indicates a tightening oil market.
Money Report
OPEC+ is considering extending its production cuts through at least the second quarter, three sources told Reuters Wednesday. The cartel could keep the cuts in place for the rest of the year, two of the sources said.
OPEC+ agreed in November to slash 2.2 million barrels per day in the first quarter of 2024 as the U.S., Canada, Guyana and Brazil pumped crude at a breakneck pace, putting pressure on oil prices late last year.
Prices have also risen this month as the conflict in the Middle East rages on, with tensions rising on the Israel-Lebanon border and Houthi militants continuing their attacks in shipping in the Red Sea.
The conflict has not disrupted crude production in the region so far, though analysts have warned there is a risk of a direct confrontation between Iran and the U.S. that would impact the oil market.
Don't miss these stories from CNBC PRO:
- Berkshire Hathaway is one of the most overbought stocks on Wall Street. Here are the others
- Want an Nvidia alternative? These 6 chip suppliers look set to gain big from the AI boom
- Jefferies says buy this under-the-radar software stock with ties to Nvidia and nearly 20% upside
- 'Opportune time to invest in real estate': Pros name 5 REITs to buy right now
Correction: WTI and Brent gained about 3% and 2.3% month to date. A previous version of this story misstated the gain.
