Oil prices drop over $1 after US inflation, Fed outlook hurts consumer demand; Brent at $82/bbl

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Key Points

Oil prices declined by more than 1% on Tuesday with lingering U.S. inflation poised to keep interest rates higher for longer, potentially dampening consumer demand at the pump..

U.S. West Texas Intermediate crude (WTI) futures for June, which are set to expire on Tuesday, slipped by $1.26, or 1.58%, to $78.54..

"In the absence of a significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy," Fed Governor Christopher Waller said in a speech to the Peterson Institute for International Economics in Washington..

"I think the market has taken away some of the risk premium because it seems even though Israel is continuing in Rafah, this is not impacting supply or demand," Flynn of Price Futures said, adding that the market does not expect any changes in Iranian oil policy after the presidents death..

Investors are focusing on supply from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC . They are scheduled to meet on June 1 to set output policy, including whether to extend some members' voluntary supply cuts of 2.2 million barrels per day..

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