On Wednesday, crude oil increased as traders anticipated higher demand from the summer driving season in the United States.
US West Texas Intermediate futures jumped 1.35% or 1.45 points to $111.25 per barrel. At the same time, Brent contracts climbed 1.07% or 1.16 to $111.81 per barrel. Accordingly, the international benchmark signaled the fifth consecutive increase.
Market participants look forward to the US Memorial Day weekend travel. Investors expected the event to be the busiest in the past two years, sparking higher fuel demand.
They anticipated more drivers to hit the road and leave behind coronavirus pandemic restrictions despite high fuel prices.
Moreover, crude prices gathered support from the persisting tight gasoline supply. Subsequently, the American Petroleum Institute reported that inventories of refined fuel products declined by 4.20 million barrels last week.
This downturn continued to stoke fears of rising gas prices and the impact of those prices on inflation.
Meanwhile, API also cited that US crude stocks climbed by 567,000 barrels for the week ended on May 19. The figure surpassed the forecasted decrease of about 690,000 barrels. In addition, it outpaced the previous draw of 2.40 million barrels.
Traders now kept an eye closed to the release of data on stockpiles from the US Energy Information Administration later this day.
France sparks optimism to ban Russian crude
Furthermore, France’s new foreign minister cited optimism on the prospect of securing European Union sanctions against Russian crude imports. This positive sentiment is despite the current opposition in some quarters.
Accordingly, the explicit bans lead oil companies to be reluctant to buy Moscow energy products even without formal legal obstacles. In line with this, self sanctions also trigger supply shortages.
However, China, the world’s biggest oil importer, has imposed new curbs on Beijing. This move slightly limited the upsides of crude prices.