Oil prices were little changed on Tuesday after their gains the previous session driven by expectations of increased fuel demand in the summer. Now, investors remain cautious ahead of US consumer price (PCE) data.
Brent futures were down 5 cents at $85.96 a barrel after rising 0.9% on Monday. Meanwhile, WTI crude oil fell 3 cents to $81.60 per barrel from its previous 1.1% gain.
Both benchmarks rose about 3% last week continuing their climb for two consecutive weeks.
Gasoline demand is rising and fuel inventories are declining as the United States, the world's largest oil consumer, enters its peak summer consumption period.
US crude oil stocks that are expected to decline by 3 million barrels in a week have started to show on Monday. Gasoline stocks are expected to decrease and distillate inventories increased last week.
However, investors remain cautious about the potential for further oil price hikes due to concerns that high interest rates will limit growth in fuel consumption which slows the economy.
The release of the PCE index, which is used as the Fed's guide for inflation, will give an indication of the next interest rate outlook. A delay in interest rate cuts will keep borrowing costs higher for longer.
In addition, the commodity is also supported by Ukraine's ongoing attacks on Russian oil infrastructure that could reduce the supply of crude oil and fuel.
On June 21, Ukrainian drones attacked four refineries including the Ilsky refinery. It is one of the main fuel producers in southern Russia.
