Oil jumps 4% as U.S. gasoline prices hit record high

Storage tanks are seen at Marathon Petroleum’s Los Angeles Refinery, which processes home & imported crude oil into California Air Sources Board (CARB), gasoline, diesel gas, and different petroleum merchandise, in Carson, California, U.S., March 11, 2022. REUTERS/Bing Guan

NEW YORK, Might 13 (Reuters) – Oil costs rose about 4% on Friday as U.S. gasoline costs jumped to a report excessive, China seemed able to ease pandemic restrictions and buyers fearful provides will tighten if the European Union bans Russian oil.

Brent futures rose $4.10, or 3.8%, to settle at $111.55 a barrel. U.S. West Texas Intermediate (WTI) crude rose $4.36, or 4.1%, to settle at $110.49.

That was the very best shut for WTI since March 25 and its third straight weekly rise. Brent fell for the primary time in three weeks.

U.S. gasoline futures soared to an all-time excessive after stockpiles fell final week for a sixth straight week. That boosted the gasoline crack unfold – a measure of refining revenue margins – to its highest because it hit a report in April 2020 when WTI completed in unfavorable territory.

“There has not been a rise in (U.S.) gasoline storage since March,” mentioned Robert Yawger, government director of vitality futures at Mizuho, noting gasoline demand is poised to spike when summer season driving season begins on the U.S. Memorial Day vacation weekend.

The U.S. 3:2:1-crack unfold , one other measure of refining margins that features gasoline and diesel, rose to a report, in response to Refinitiv knowledge going again to Might 2021.

Car membership AAA mentioned U.S. costs on the pump rose to report highs on Friday of $4.43 per gallon for gasoline and $5.56 for diesel.

Oil costs have been risky, supported by worries a attainable EU ban on Russian oil may tighten provides however pressured by fears {that a} resurgent COVID-19 pandemic may minimize international demand.

“An EU embargo, if absolutely enacted, may take about 3 million bpd (barrels per day) of Russian oil offline, which is able to fully disrupt, and in the end shift international commerce flows, triggering market panic and excessive value volatility,” mentioned Rystad Power analyst Louise Dickson. learn extra

This week, Moscow slapped sanctions on a number of European vitality firms, inflicting worries about provides. learn extra

In China, authorities pledged to assist the financial system and metropolis officers mentioned Shanghai would begin to ease coronavirus visitors restrictions and open outlets this month.

“Crude costs rallied on optimism that China’s COVID state of affairs was not worsening and as dangerous property rebounded,” mentioned Edward Moya, senior market analyst at knowledge and analytics agency OANDA.

World shares rose after a risky week of buying and selling, pushing up inventory indexes in america (.DJI), (.SPX), (.IXIC) and Europe. learn extra

Pressuring oil costs throughout the week, inflation and fee rises drove the U.S. greenback

The EU mentioned there was sufficient progress to relaunch nuclear negotiations with Iran. The U.S. mentioned it appreciated the EU’s efforts however mentioned there was no settlement but and no certainty that one could be reached. learn extra [nL2N2X51LE]

Analysts mentioned an settlement with Iran may add one other 1 million bpd of oil provide to the market.

Further reporting by Noah Browning in London, Sonali Paul in Melbourne and Isabel Kua in Singapore; Modifying by Marguerita Choy and David Gregorio

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