Crude and refined product futures experienced significant gains on Tuesday, following a notable decrease in inflation and an upward revision of the global oil demand forecast by the International Energy Agency (IEA).

As the dollar index plummeted by over 1%, the futures complex experienced a surge. Earlier in the day, data from the Labor Department revealed a 4% increase in core prices (excluding volatile food and energy items) compared to the previous year, marking the smallest annual change since September 2021. Analysts have suggested that this development should prompt Federal Reserve policymakers to reconsider interest rate hikes.

As of 11:25 a.m. ET, NYMEX December West Texas Intermediate crude futures had climbed $1.40 to $79.65 per barrel (bbl), while January WTI also saw a similar gain, reaching $79.55/bbl.

In London, January ICE Brent crude futures based in London were up by $1.40 to $83.90/bbl, with February Brent rising by a similar amount to reach $83.60/bbl.

Among refined product futures, the most actively traded January NYMEX RBOB saw an increase of 3.50 cents to $2.2440 per gallon (gal), while the front-month December RBOB rose by 3.40 cents, reaching $2.27/gal.

January ULSD experienced a 3.70 cent rise, reaching $2.8135/gal, while December ULSD climbed by 4.25 cents to $2.8815/gal.

The IEA's monthly report stated that it has revised its total oil demand growth expectation for 2023 by 100,000 barrels per day (b/d) to 2.4 million b/d, bringing the average daily demand to 102 million b/d. The agency attributed this increase to higher crude consumption from China and the United States.

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