Oil prices rose nearly 4% on Friday as U.S. petrol prices reached record highs, China appeared ready to ease epidemic restrictions and investors worried that supplies would be tightened if the European Union banned Russian oil.
Brent futures rose $ 4.10, or 3.8%, to settle at 1 111.55 a barrel. US West Texas Intermediate (WTI) crude rose $ 4.36, or 4.1%, to $ 110.49.
This is WTI’s highest close since March 25 and its third weekly increase. Brent fell for the first time in three weeks.
US gasoline futures hit an all-time high after stocks fell in the sixth week last week. This has increased the gasoline crack spread – a measure of profit margin payments – reaching its highest level since hitting a record in April 2020 when the WTI ended in negative territory.
“Petrol storage has not increased since (March) in the US,” said Robert Yaoger, executive director of Mizuho Energy Futures.
US 3: 2: 1-crack spread, another measure of refining margin including petrol and diesel, reached a record, according to refinancing data back from May 2021.
Automobile club AAA said Friday that U.S. prices at the pump rose to a record high of $ 4.43 per gallon of gasoline and $ 5.56 for diesel.
Oil prices have been volatile, with supply likely to be tight due to possible EU sanctions on Russian oil but backed by fears that a resurgent COVID-19 epidemic could dampen global demand.
“If the EU sanctions are fully implemented, Russian oil could take about 3 million bpd (barrels per day) offline, which would completely disrupt and ultimately change world trade flows, triggering market panic and extreme price volatility,” said Ristad Energy. Analyst Lewis Dixon. Read more
This week, Moscow imposed sanctions on several European power organizations, raising concerns about supplies. Read more
In China, authorities have pledged to support the economy, and city officials say Shanghai will ease coronavirus traffic restrictions this month and begin opening stores.
“Crude prices have risen on the basis of optimism that China’s Kovid situation is not getting worse and that risky assets have returned,” said Edward Moya, senior market analyst at data and analytics firm OANDA.
Global stocks rose after a turbulent week of trading, pushing stock indices in the United States and Europe.
Weekly oil price pressures, inflation and rate hikes have driven the US dollar
The EU says enough progress has been made to resume nuclear talks with Iran. The United States has said it appreciates the EU’s efforts, but says no agreement has been reached yet.
Analysts say an agreement with Iran could increase oil supplies to the market by another 1 million bpd.
Read more: Vegetable oil imports down 13% to 9.12 lakh tonnes in April