Oil Tumbles After US Inflation Rises to a 40-Year High

Bloomberg2022-06-10

Oil dropped Friday morning after the US Labor Department reported inflation accelerated to a fresh 40-year high in May.

West Texas Intermediate fell almost 2% to near $119. The inflation report chilled broader markets and sent a signal to the Federal Reserve to extend an aggressive series of interest-rate hikes. The report reversed earlier gains that were driven by signs of China starting to ease virus curbs in key cities.

Oil has maintained its upward momentum this year through bouts of volatile trading following Russia’s invasion of Ukraine in late February. Goldman Sachs Group Inc. this week boosted its price forecasts into 2023, while OPEC warned that most members are “maxed out” on crude production.

The European Union also is working to ban Russian crude imports, stoking supply fears and compounding inflation risks.

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