Oil prices surged in early trade on Wednesday, buoyed by limited supplies and the expectation of increased demand as the US summer driving season approaches.
By 0020 GMT, Brent crude futures had risen 46 cents, or 0.4 percent, to $114.02 per barrel. WTI crude futures for July delivery in the United States were up 58 cents, or 0.5 percent, to $110.35 a barrel. On Tuesday, Brent gained 0.1 percent, while WTI fell 52 cents.
On Tuesday, France’s new foreign minister expressed confidence that those who remain opposed to a new European Union sanctions package that would phase out Russian oil shipments to the EU could be persuaded, and that the group would reach an agreement that would limit global supply.
Meanwhile, a Biden administration official traveled to India on Tuesday to meet with government officials and private sector leaders on US sanctions against Russia over its invasion of Ukraine, according to the Treasury Department, as Washington tries to limit India’s oil purchases from rising. “A unique military operation” is how Moscow describes its actions in Ukraine.
Despite high fuel costs, supply could tighten just as US Memorial Day weekend traffic is predicted to be the busiest in two years, as more American drivers take the road to shake off coronavirus pandemic restrictions.
According to market sources citing American Petroleum Institute numbers, gasoline stockpiles declined by 4.2 million barrels last week, while crude stocks rose by 567,000 barrels. Stocks of distillates fell by 949,000 barrels.
On Wednesday, the US government was due to provide data on stocks. In a Reuters poll, analysts predicted that US crude oil and gasoline inventories would fall last week, but distillate inventories would rise.
Beijing has increased quarantine efforts to halt a month-long COVID outbreak, while Shanghai authorities aim to keep most restrictions in place this month until removing the two-month-old lockdown completely on June 1.