By Rowena Edwards LONDON (Reuters) -Oil prices rose on Wednesday, buoyed by tight supplies and the prospect of rising demand from the summer driving season in the United States, the world’s biggest crude consumer. Brent crude futures for July rose for a fifth session running, gaining 70 cents, or 0.6%, to $114.26 a barrel by […]
Oil edges higher on tight supply and expected demand uplift
By Rowena Edwards
LONDON (Reuters) -Oil prices rose on Wednesday, buoyed by tight supplies and the prospect of rising demand from the summer driving season in the United States, the world’s biggest crude consumer.
Brent crude futures for July rose for a fifth session running, gaining 70 cents, or 0.6%, to $114.26 a barrel by 1333 GMT.
U.S. West Texas Intermediate (WTI) crude for July delivery rose 68 cents, or 0.6%, to $110.45.
“Brent crude is trading in a very convincing upwards trend aided by very tight product markets again leading to a hunt for light sweet crudes which are naturally rich in easily refined gasoline and diesel products,” Swedish bank SEB said in a note.
U.S. gasoline inventories were down by 4.2 million barrels last week, market sources said on Tuesday, citing American Petroleum Institute figures.
Stockpiles data from the U.S. government is due on Wednesday, with analysts polled by Reuters expecting U.S. crude oil and gasoline inventories to have fallen last week. [API/S] [EIA/S]
“Just ahead of the summer driving season, U.S. gasoline stocks find themselves at their seasonally lowest level since 2014,” said Commerzbank analyst Carsten Fritsch.
U.S. Memorial Day weekend travel is expected to be the busiest in two years, causing fuel demand to rise as more drivers hit the road and shake off coronavirus pandemic restrictions despite high fuel prices.
At the same time, global crude supplies continue to tighten as buyers avoid oil from Russia, the world’s second-largest exporter, after the invasion of Ukraine, which Moscow calls a “special military operation”.
The EU hopes to be able to agree on sanctions that would phase out Russian oil imports before the next meeting of the European Council, the council’s president, Charles Michel, said on Wednesday.
Even without a legal ban, self-sanctioning by numerous European companies has led to a record amount of Russia’s Urals crude oil sitting in vessels at sea as it struggles to find buyers.
On the flip side is the strict approach to the COVID-19 pandemic from China, the world’s biggest oil importer. Beijing has imposed new curbs while Shanghai plans to keep most restrictions in place this month.
(Reporting by Rowena EdwardsAdditional reporting by Arathy Somasekhar in Houston and Isabel Kua in SingaporeEditing by David Goodman, Elaine Hardcastle)