Oil is advancing on signs of further tightening in major U.S. commodity markets, and it is speculated that China may move closer to easing the anti-virus lockdown that has reduced crude demand from the world’s top importers.
West Texas Intermediate rose to $ 114 a barrel after falling on Tuesday. The American Petroleum Institute reports that gasoline inventories fell by more than 5 million barrels last week, according to people familiar with the data, which also showed lower crude holdings. Official figures come later Wednesday.
In Asia, meanwhile, traders are looking for signals that Chinese authorities may be ready to ease sanctions imposed to combat a coronavirus outbreak in Shanghai and other cities, potentially reviving energy costs. The main commercial center again did not report any new cases outside the quarantine.
Growing demand and barriers from the Ukraine war combined to support gains on the way to the sixth monthly rise in oil prices – possibly the best run in a decade. The wave is contributing to higher inflation, and Federal Reserve Chair Jerome Powell promised on Tuesday that the US Federal Reserve will continue to raise interest rates until clear evidence that price gains are slowing.
“US inventory data has been helpful for oil,” said Warren Patterson, head of Singapore-based product strategy at ING Group NV. “As we move into the driving season, a tightening petrol market should be conducive to crude demand, the need to run higher refineries.”
Oil markets are in recession, a bullish pattern where near-term prices trade higher. The spread between WTI’s two closest December deals is close to 13 13 a barrel, up from $ 5 at the beginning of the year.
The price of U.S. gasoline has reached unprecedented levels, despite both futures deals and pumps – despite President Joe Biden’s order to release large sums of crude oil from strategic reserves. Gasoline holdings in 2022 have already fallen by about 3% and stand below the five-year seasonal average.
With the onset of summer driving season, there is a lot of pain in the pump According to Auto Club AAA, retail gasoline prices have risen above $ 4 per gallon for the first time in all US states, with California, the most expensive state, where prices average more than $ 6 per gallon, according to Auto Club AAA.
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