Oil prices have risen sharply since the start of the US driving season, as a result of tight fuel supplies

Oil futures rose on Monday, finding support on the tight supply of petrol and diesel that pushed motor-fuel prices to an all-time high as the summer U.S. driving season.

Price action
  • West Texas Intermediate Crude CL.1, for July Delivery
    + 0.71%

    CL00,
    + 0.71%

    CLN22,
    + 0.71%
    The New York Mercantile Exchange rose $ 1.06, or 1%, to $ 111.34 a barrel.

  • July Brent Crude BRN00,
    + 0.84%

    BRNN22,
    + 0.84%,
    Global benchmark, ICE Futures Europe was up 21 1.21 or 1.1% to 113.76 per barrel.

  • June Petrol RBM22,
    -0.02%
    P 0.2% to $ 3.844 a gallon, after finishing a record above $ 4 a gallon early last week. June heating oil HOM22,
    + 0.28%
    Was up 0.5% at 64 3.64 per gallon.

  • June Natural-Gas Futures NGM22,
    -2.17%
    1.3% lower $ 7.98 per million British thermal units.

Market drivers

“Oil prices are supported because petrol markets are heading into a tough U.S. driving season amid strong demand. Refineries are usually in ramp-up mode to feed U.S. drivers who quench their thirst at the pump, “said Stephen Innes, managing partner at SPI Asset Management.

Last week, the Energy Information Administration reported that total U.S. motor gasoline inventory fell 4.8 million barrels in the week ended May 13, about 8% below the five-year average for this time of year. Distilled fuel inventory rose 1.2 million barrels in the week ended May 13, but was about 22% lower than the five-year average.

The price of petrol at the pump is on record, while the price of diesel, important for transporting goods, has reached an all-time high.

Analysts say crude oil has also dwindled as China moves to ease the lockdown in Shanghai. Traders, however, were watching the rise of the Kovid incident in Beijing. Where officials have increased orders for students and staff to stay at home and will conduct more mass examinations in the country’s capital.

Meanwhile, news that US President Joe Biden and Saudi Crown Prince Mohammed bin Salman are working towards a meeting could put a lid on the opposite of crude oil, Ines said. Saudi Arabia has so far resisted calls from the Organization of Petroleum Exporting Countries and its allies to aggressively increase output in response to tightening crude supplies.

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