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Oil rises on strong demand, tight supply According to Reuters


© Reuters. The pattern of oil tanks and a pump jack is shown in front of a rising stock chart, and the “$100” in this illustration was taken on Feb. 24, 2022. REUTERS / Dado Ruvic / Illustration

By Arathy Somasekhar

HOUSTON (Reuters) – Oil prices rose on Tuesday on high summer fuel demand while supplies remained tight due to sanctions on Russian oil following the Ukraine invasion.

Futures prices fell 52 cents, or 0.5%, higher at $114.65 a barrel. The contract for US West Texas Intermediate (WTI) crude for July delivery expired on Tuesday, closing at $110.65, up $1.09, or 1%. The more active August contract was up $1.53 at $109.52.

Both benchmarks fell weekly last week. For WTI it was the first weekly loss in eight weeks, for Brent it was the first in five weeks.

“You have some people jumping in here to buy the bottom or what they hope is the bottom of the market,” said Robert Yawger, director of energy futures at Mizuho in New York.

The 50-day simple moving average of US futures last month hit its highest level since 2008 and Brent hit its highest since 2013.

Price supported when Exxon Mobil Corp (NYSE:) CEO Darren Woods has predicted three to five years of fairly tight oil markets.

The head of Vitol, Russell Hardy, flagged overinvestment and a decline in crude production capacity as well as a tight refining situation.

and gasoline stocks may have fallen last week, while distillate stocks have increased, a preliminary Reuters poll showed. Weekly inventory data is delayed by a holiday Monday, with industry data due Wednesday at 4:30pm and government data scheduled for Thursday at 11am. [EIA/S]

On the demand side, UBS analyst Giovanni Staunovo said that despite concerns about economic growth, data continues to show steady oil demand.

“We expect oil demand to improve further, benefiting from the reopening of China, summer travel in the Northern Hemisphere and warmer weather in the Middle East. Given the growth in supply reduce demand growth in the coming months, we continue to expect higher oil prices,” he said.

The White House has asked the executives of six oil companies to attend a meeting on Thursday to discuss how to lower high energy prices.

On Monday, US President Joe Biden said a decision on suspending the federal gasoline tax could be made this week. Treasury Secretary Janet Yellen said the United States was also in talks with Canada and other allies to further limit Moscow’s energy revenues by imposing a price ceiling on Russian oil.

Markets were supported by supply anxiety following sanctions on oil shipments from Russia, the world’s second-largest oil exporter, and concerns that Russian output could fall due to sanctions. penalties for equipment necessary for production.

European Union leaders aim to keep pressure on Russia at their summit this week by pledging to continue implementing sanctions, a draft document shows.

“Supply concerns are unlikely to ease unless there is a resolution to the Russia-Ukraine war, or unless we see an increase,” said Madhavi Mehta, commodities research analyst at Kotak Securities. strong in terms of supply from the US or OPEC.”

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