Oil Market: Analysts Assess Raw Material Price Levels Since the Beginning of the Year.

Oil prices remain near their highest levels in the past four months, as the market closely watches new U.S. sanctions regarding Russian oil.

According to Reuters, the price of Brent crude has decreased by 0.4% to $80.73 per barrel, while U.S. WTI (West Texas Intermediate) fell by 0.2% to $78.64 per barrel, as reported by Economic Truth.

On Monday, prices rose by 2% after the U.S. Treasury announced sanctions against Gazprom Neft and Surgutneftegas, as well as against 183 vessels of the Russian 'shadow fleet'.

Headlines related to sanctions against Russian oil have been a determining factor for oil price changes over the past week. Combined with strong U.S. economic indicators, this has created upward momentum through a tighter balance between demand and supply,' noted IG market strategist Yip Jun Rong.

'Today we are seeing a slight price drop. As prices have risen nearly 10% since the beginning of the year, this encourages profit-taking ahead of risks associated with anticipated inflation data in the U.S.,' he added.

Later today, the U.S. Producer Price Index (PPI) will be published, and the Consumer Price Index (CPI) data will be available on Wednesday.

Importance of Wednesday's Data

Wednesday's data is highly significant: any increase in core inflation above the expected 0.2% may complicate further interest rate cuts by the Federal Reserve this year. Lowering interest rates typically stimulates economic growth, which, in turn, can increase demand for oil.

The latest increase to a three-month high indicates improved sentiment in the market, but despite the easing of overall bearish pressure, a stronger catalyst is needed for sustainable broad growth,' Yip added.

While analysts expect significant impacts from new sanctions on Russian oil supply volumes, the actual physical impact may be less.