(Reuters) -Oil prices stabilised on Thursday as investor caution dominated ahead of inflation data expected to offer clues on U.S. interest rates.
Brent crude dipped 12 cents to $87.43 a barrel by 0955 GMT while West Texas Intermediate crude (WTI) edged down by 21 cents to $84.19.
Both benchmarks have been on a sustained rally since June, with WTI trading at its highest this year on Thursday and Brent hitting its highest price since January.
Oil prices have been boosted in recent days by extensions to output cuts by Saudi Arabia and Russia, alongside supply fears driven by the potential for tensions between Russia and Ukraine in the Black Sea region to threaten Russian oil shipments.
“At present it does not appear that there is anything untoward in the energy sector to upset this rally. Commentators and traders alike are much concentrated on fundamentals rather than what might be ailing the wider macroeconomic suite,” said John Evans of oil broker PVM.
“The poor state of China’s manufacturing, its property sector and some stubborn world inflation stand out as issues that the oil fraternity chooses to ignore at present.”
All eyes are on July consumer prices data from the United States on Thursday, which should provide a steer on the U.S. Federal Reserve’s future monetary policy.
“It will take something big for the Fed to consider hiking again, you would think, having shifted to a more gradual approach in recent months,” said OANDA analyst Craig Orlam.
Also weighing on prices, U.S. crude inventories rose by 5.9 million barrels in the past week, eclipsing analyst expectations in a Reuters poll for a rise of 0.6 million barrels, U.S. Energy Information Administration data showed on Wednesday.
U.S. crude oil exports fell by 2.9 million barrels per day last week, the steepest fall on record, data showed. But the market is expecting crude exports to rise because of the U.S. crude futures and Brent spread, said Phil Flynn, analyst at Price Futures Group.
Meanwhile, recent data showed the consumer sector in China fell into deflation and factory gate prices extended declines in July, raising concerns about fuel demand in the world’s second-largest economy.
