Texas markets

Oil hit its highest level since March as fuel markets heat up

(Bloomberg) – Oil climbed above $114 as global pressure on refined products sparked concerns over summer supplies and continued to push fuel prices higher.

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West Texas Intermediate rose 3.4% to the highest level since late March. U.S. gasoline futures rose above $4 a gallon for the first time ever, while the national average retail price hit a new record high. Rising futures tend to quickly pass through the pump, signaling more pain for drivers when the summer driving season begins later this month.

“The stronger the commodities, the more optimistic the market is about rising crude volumes this summer,” said Scott Shelton, energy specialist at TP ICAP Group Plc.

Purchases in the United States – or the difference between contracts for immediate delivery and those to come – have resumed thanks to a drop in inventories in Cushing, Oklahoma. Storage center inventories fell about 2.629 million barrels in the week to May 13, traders said citing data from Wood Mackenzie. The early gap widened to $2.45, the biggest gap since March.

The tightening in US stocks put today’s session on a rallying trajectory. Earlier, futures fell as China’s industrial production and consumer spending fell in April to the worst levels since the start of the pandemic, while apparent oil demand and crude processing plunged. Strict lockdowns to stop the virus have reduced fuel consumption.

Shanghai has been one of the hardest hit by virus restrictions, but there may be some relief on the horizon. The city reported a second day with no Covid-19 cases outside of quarantine, putting it on course to meet the three days of zero community transmission needed to begin easing a punitive lockdown.

European Union foreign ministers are meeting in Brussels on Monday to discuss the next round of Russian sanctions and diplomats have floated the idea of ​​delaying a proposed ban on its oil imports after objections from Hungary . Germany plans to stop importing Russian crude by the end of the year, even if the EU fails to agree on coordinated action, according to government officials.

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