Oil climbs in tight market as driving season nears

Oil prices rose in early trading on Monday with US fuel demand, tight supply and a slightly weaker US dollar supporting the market, as Shanghai prepares to reopen after a two-month lockdown that fueled concerns about a sharp slowdown in growth.

Brent crude futures rose 82 cents to $113.37 a barrel at 0126 GMT, while US West Texas Intermediate (WTI) crude futures climbed 69 cents, or 0.6 %, at $110.97 a barrel, adding to last week’s weak gains for both contracts.
“Oil prices are supported as gasoline markets remain tight amid strong demand as the peak driving season approaches in the United States,” said Stephen Innes, managing partner of SPI Asset. Management.

“Refineries are typically in ramp-up mode to feed the insatiable thirst of American drivers at the pumps.”

Peak driving season in the United States traditionally begins on Memorial Day weekend at the end of May and ends on Labor Day in September.
Analysts said that despite fears a fuel price spike could hurt demand, mobility data from TomTom and Google had climbed in recent weeks, showing more people on the roads in places like the United States.

“High-frequency data suggests demand continues to grow,” ANZ analysts said in a note.

A weaker US dollar also lifted oil on Monday, as it makes crude cheaper for buyers holding other currencies.

Market gains were capped, however, by concerns over China’s efforts to crush COVID with lockdowns, even with Shanghai reopening on June 1.

Lockdowns in China, the world’s biggest oil importer, have hammered industrial production and construction, prompting measures to support the economy, including a bigger-than-expected mortgage rate cut last Friday.

(Edited by : Akriti Anand)


Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
Back to top button