Oil ticks higher on strong demand, tight supply

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Oil prices edged up on Tuesday on high summer fuel demand while supplies remained tight because of sanctions on Russian oil after its invasion of Ukraine.

Brent crude futures settled 52 cents higher at $114.65 a barrel,

While the U.S. West Texas Intermediate (WTI) crude contract for July expired on Tuesday, closing at $110.65, with a gain of $1.09,

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

The 50-day simple moving average of U.S. front month futures touched its highest since 2008, and Brent’s touched its highest since 2013.

Prices drew support when Exxon Mobil Corp Chief Executive Darren Woods predicted three to five years of fairly tight oil markets.

Vitol’s head Russell Hardy flagged under-investment and a decline in production capacity for crude oil and a tight refining situation.

U.S. crude and gasoline inventories likely fell last week, while distillate stockpiles were seen up, a preliminary Reuters poll showed. Weekly inventory data is delayed by Monday’s public holiday, with industry data due on Wednesday at 4:30 p.m. and government data scheduled for Thursday at 11 a.m. [EIA/S]

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




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