Crude oil prices rose 2 per cent on Wednesday to their highest in more than a month as cooling US inflation data spurred hopes that the Federal Reserve is getting closer to ending its cycle of interest-rate hikes and cushioned the impact of a small build in US crude oil stocks.

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Brent crude settled up $1.72, or 2.01 per cent, at $87.33 a barrel, its highest since late January, while US West Texas Intermediate closed up $1.73, or 2.1 per cent, to $83.26, its highest in five months.

The crude oil prices in the international market also rose about 2 per cent on Tuesday.

The Consumer Price Index (CPI) in US climbed 0.1 per cent last month after advancing 0.4 per cent in February, the Labour Department said. In the 12 months to March 31, the CPI increased 5 per cent, the smallest year-on-year gain since May 2021.

US President Joe Biden's top economic adviser and ex-Federal Reserve vice chair, Lael Brainard, also said she was seeing inflation coming down.

The dollar dropped sharply after the data. A weaker US currency makes dollar-priced oil cheaper for buyers holding other currencies.

Crude inventories rose by 597,000 barrels in the last week to 470.5 million, compared with analysts' expectations in a Reuters poll for a 600,000-barrel drop. Gasoline and distillate stocks drew less than expected.

Meanwhile, the global oil market could see tightness in the second half of 2023, which would push oil prices higher, said Fatih Birol, executive director of the International Energy Agency.

In a negative for oil demand, the International Monetary Fund on Tuesday trimmed its 2023 global growth outlook, citing the impact of higher interest rates.

The market is also waiting for clarity on oil demand and supply, with monthly reports from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency due on Thursday and Friday, respectively.

With Reuters Inputs