Oil (Brent Crude, WTI) Analysis
- Topside surprise in US employment costs stoke USD and ‘higher for longer’ narrative ahead of FOMC meeting
- EIA revision sees US oil demand rise in February
- Brent crude, WTI turn lower with key support levels in sight
- Get your hands on the Oil Q2 outlook today for exclusive insights into key market catalysts that should be on every trader's radar:
Topside Surprise in US Employment Costs Stoke USD and the ‘Higher for Longer’ Narrative Ahead of FOMC
The Employment Cost Index rose by more than even the most optimistic of analyst predictions, sending the US dollar higher towards the end of the European session. Compensation costs for civilian workers reported by the US Bureau of Labor Statistics rose in the three-month period ending March 2024 by 1.2%, up from 0.9% for the three months ending in December 2023. The data appears in a week full of jobs data before non-farm payrolls takes center stage on Friday.
Customize and filter live economic data via our economic calendar
Source: BLS
The increase in labour costs exacerbate concerns around a reacceleration in price pressures in the US after CPI and PCE measures of inflation revealed hot month-on-month figures. The FOMC is due to release its statement tomorrow evening where is widely anticipated that further acknowledgement of the stubborn prices will emerge. Markets propped up the greenback on the even of the FOMC announcement.
In addition, the Energy Information Agency (EIA) revised total US oil consumption in February to 19.95m barrels per day (bpd), up 425,000 bpd from estimates based on weekly data. This has done little to counter the daily decline at the time of writing.
Brent Crude, WIT Turn Lower with Key Support Levels in Sight
Brent prices dropped notably on Tuesday afternoon in the European session sometime after the dollar pushed higher.
Brent Crude 5-Minute Chart