Despite a sharp surge in U.S. inflation, and data showing an increase in U.S. crude inventories last week, crude oil prices climbed higher on Wednesday, rebounding smartly after suffering a sharp loss in the previous session.
West Texas Intermediate Crude oil futures for August ended higher by $0.46 at $96.30 a barrel.
WTI crude futures had plummeted $8.25 or 7.9% to $95.84 a barrel on Tuesday, closing below $100 a barrel for the first time in two months.
Brent crude futures ended marginally up at $99.57 a barrel today.
Data released by U.S. Energy Information Administration showed crude inventories rose by 3.254 million barrels in the week ended July 8, against expectations for a drop of 154,000 barrels.
Gasoline stockpiles rose by 5.825 million barrels last week, while forecasts were for a drop of 357,000 barrels. Meanwhile, distillate stockpiles increased 2.668 million barrels, against forecast for a rise of 1.591 million barrels.
Data from the U.S. Labor Department showed that the consumer price index shot up by 1.3% in June after jumping by 1% in May. Economists had expected consumer prices to leap by 1.1%.
With the bigger than expected monthly surge, the annual rate of consumer price growth accelerated to 9.1% in June, reflecting the biggest increase since November 1981. Economists had expected the annual rate of consumer price growth to accelerate to 8.8% in June from 8.6% in May.
The red-hot inflation data supported expectations for a more aggressive tightening path from the Fed in the coming months.