By Barani Krishnan

U.S. crude oils posted their fourth straight day’s gains. Prices settled at $80 per barrel Tuesday. The trade was waiting for weekly inventory data which may show an additional build. A market that is not paying much attention to oil data could see another rise.

U.S. crude’s benchmark settled up 12 cents, or 0.2%, at $80.64 per barrel. WTI gained over 4% in the past week, after a drop of almost 2%. 

Tuesday’s firmer close came as the dollar rose to a one-year high on expectations that the Federal Reserve will announce a tapering of its massive bond-buying program next month amid concerns of runaway inflation from soaring energy prices. Typically,  a stronger dollar will weigh on dollar-denominated commodities.  

The global benchmark oil price, London-traded crude oil fell by 0.3% to $83.42, or 23 cents. It was Brent’s first decline after a three-day winning streak that netted more than 3%.

“The focus over the next 24 hours will be on US stockpiles, which have been increasing,”  said Ed Moya, analyst at online trading platform OANDA. He, however, cautions that a surprise draw instead of build could “easily send WTI crude back above the $82 level”.

At 4:30 PM ET (23:30 GMT), The American Petroleum Institute will publish a snapshot of U.S. crude and gasoline stockpiles for week ending October 8. These figures are a preview of the U.S. Energy Information Administration’s official weekly inventory data, due Wednesday at the EIA. 

Analysts tracked by Investing.com have forecast that rose by 140,000 barrels last week, on top of the previous week’s build of 2.35 million.

After the increase in inventories of 3.26million barrels over the past week, forecasts suggested that inventory levels would likely rise by 133,000 barrels.

Stockpiles of , which include diesel and , is expected to have dropped by 1.0 million barrels, extending the previous week’s slide of 396,000.

Oil prices tend to follow economic growth closely, but the recent rally in crude oil is totally out of line with the inflationary burden that economies have experienced since the 18-months of severe hardship brought on by the coronavirus epidemic. 

According to the IMF’s Tuesday World Economic Outlook, growth momentum is declining while there has been more uncertainty.  IMF fears that rising commodity prices could force central banks to tighten their cycles, which could lead to selloffs of global equities.

Richard Clarida, Fed Vice Chairman, said that the central bank is not planning to raise rates yet but would most likely reduce its ongoing economic stimulus. This has been accused of increasing price pressures.

“Oil price volatility remains elevated as investors await to see how the global energy crisis unfolds,” Moya said, adding that one interesting development  will be how Western governments deal with Iran — the virtual outcast in OPEC which has meaningful supply elasticity in oil due to U.S. sanctions on the country.

“Iran’s ability to ramp up production could easily save Europe if it has a cold winter,” noted Moya. “Both sides have added motivation since the talks stalled in June.  If progress is made after several weeks of talks, a revival or the Iran nuclear deal could immediately bring Brent back towards the mid-$70s.”