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Oil futures rose Wednesday, finding support on tight supplies of gasoline ahead of the start of the U.S. summer driving season over Memorial Day weekend.
Price action
-
West Texas Intermediate crude for July delivery
CL.1,
+1.26% CLN22,
+1.26%
rose $1.43, or 1.3%, to $111.20 a barrel on the New York Mercantile Exchange. -
July Brent crude
BRNN22,
+1.07% ,
the global benchmark, rose $1.21, or 1.1%, to $114.77 a barrel on ICE Futures Europe. -
June gasoline
RBM22,
+1.71%
rose 1.7% to $3.753 a gallon, while June heating oil
HOM22,
+1.54%
was up 1.9% at $3.855 a gallon. -
June natural-gas futures
NGM22,
+1.08%
rose 1.4% to $8.922 per million British thermal units.
Market drivers
The American Petroleum Institute late Tuesday said U.S. crude inventories rose 567,000 barrels last week, according to market sources. Gasoline supplies fell 4.2 million barrels, while supplies of distillates were down 949,000 barrels.
Official storage data from the U.S. Energy Information Administration is due Wednesday morning. Analysts surveyed by S&P Global Commodity Insights look for crude to show a rise of 100,000 barrels, while gasoline supplies are seen down 500,000 barrels and distillates up 600,000 barrels.
“The tightening in the U.S. gasoline market will raise concerns over supply as we move into driving season. Tightness in the U.S. is pulling in gasoline from elsewhere, including Europe, which is also looking increasingly tight,” said Warren Patterson, head of commodities strategy at ING, in a note.
U.S. Energy Secretary Jennifer Granholm on Tuesday, speaking to reporters in Louisiana, was asked if the Biden administration was weighing restrictions on petroleum exports to put a lid on gasoline and diesel prices. “I can confirm the president is not taking any tools off the table,” Granholm said, according to Reuters.
“Up until now the U.S. administration has been reluctant to go down this route and instead has focused on releases from the Strategic Petroleum Reserve,” Patterson said. While releasing reserves ”may offer some relief to crude oil prices, they may do little to ease gasoline shortages if the bottleneck is on the refining side,” he said.
The European Union continues to negotiate toward a ban on imports of Russian oil and other sources of energy, with a meeting of EU leaders at the end of the month looking less likely to produce a final agreement, Patterson said.
