US gasoline futures and pump prices hit all-time highs
Oil prices rose nearly 4% on Friday as US gasoline prices hit a record high, China appears poised to ease pandemic restrictions, and investors fear supply will tighten if the European Union bans Russian oil.
Brent futures were up $4.10, or 3.8%, to settle at $111.55 a barrel. West Texas Intermediate (WTI) crude was up $4.36, or 4.1%, to settle at $110.49.
It was the highest close for WTI since March 25 and its third weekly rise in a row. Brent fell for the first time in three weeks.
U.S. gasoline futures rose to an all-time high after inventories fell for the sixth week in a row last week. That puts gasoline crack propagation, a measure of refined profit margins, to its highest level since WTI set a record in April 2020, when it finished in negative territory.
Gasoline and diesel demand will increase as the summer driving season begins on the U.S. Memorial Day holiday weekend, which is the last Monday in May each year.
US 3:2:1-crack spread, another measure of refinery margins involving gasoline and diesel, rose to a record high, according to Refinitiv data stretching back to May 2021.
Pump prices in the US rose to record highs at $4.43 per gallon for gasoline and $5.56 for diesel on Friday, auto club AAA said.
Oil prices are volatile amid fears that a resurgent COVID-19 pandemic could dampen global demand, while amid concerns that a possible EU ban on Russian oil could tighten supply.
If the aforementioned EU embargo goes into full effect, about 3 million barrels of Russian oil per day could go offline, which would change global trade flows, will cause market panic and extreme price volatility.
This week, Moscow has imposed sanctions on several European energy companies, raising concerns over supply.
In China, officials have pledged to support the economy and said Shanghai will begin easing coronavirus traffic restrictions and opening the shops this month.
Crude oil prices rose on optimism that China's COVID situation and risky assets are recovering. Global stocks rose after a volatile trading week. Oil prices, inflation and interest rate hikes, which had been pressing throughout the week, strengthened the US dollar.
Analysts say a deal with Iran could add another 1 million barrels of oil per day to the market.
The EU said it was reason enough to restart nuclear talks with Iran, while the US said it appreciated the EU's efforts but that there was no agreement yet and there was no certainty that a deal could be reached.
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