Oil prices jumped on Wednesday; it had support from limited supply and the expectation of increased demand as the summer driving season in the United States, the world’s largest petroleum consumer, approaches.
Brent oil futures increased 44 cents, or 0.4 percent, to $114.00 per barrel at 0619 GMT. On Tuesday, Brent futures rose 0.1 percent, extending their winning streak to five days. WTI oil futures for July delivery in the United States increased 51 cents, or 0.5 percent, to $110.28 a barrel. On Tuesday, the contract dropped 52 cents. Global petroleum supplies are tightening as consumers shun oil from Russia, the world’s second-largest supplier. On Tuesday, France’s new foreign minister expressed confidence that those who are still opposed to a new European Union sanctions package that would phase out Russian oil shipments to the union might be persuaded. The group would reach an agreement that would reduce world supplies.
Supply Level and Sanctions
According to the Treasury Department, a Biden administration official travelled to India on Tuesday to speak with authorities and private industry leaders about US sanctions on Russia to restrict India’s imports of Russian oil from expanding. The oil supply situation is tightening as Memorial Day weekend travel in the United States should be the busiest in two years; it drove gasoline demand to surge as more drivers prepare to hit the road despite high fuel costs to shake off coronavirus pandemic restrictions. The predicted fuel demands this weekend show up in inventory statistics in the United States.
According to the sources, distillate stocks fell by 949,000 barrels, while crude stocks grew by 567,000 barrels. On Wednesday, the US government will reveal data on stocks. Analysts predicted that crude oil and gasoline stocks in the United States would decline last week; however, distillate inventories still rose. Beijing, the world’s largest oil importer, reinforced its COVID-19 dragnet; meanwhile, Shanghai officials expect to keep most restrictions in place until they lifted the two-month-old blockade completely on June 1.
