By Barani Krishnan
Investing.com - Oil prices dipped on Friday but posted a gain of more than 4% on the week and month as average pump prices of gasoline hit seven-year highs of more than $3 per gallon going into Monday’s Memorial Day holiday.
Memorial Day marks the unofficial start of the peak U.S. summer driving season and the American Automobile Association expects as many as 37 million travelers for the occasion this year, up 60% from last year’s pandemic-suppressed number of 23 million. Those driving over the three-day stretch usually fill their tanks more than once, typically resulting in a boon for gasoline consumption.
Oil prices have mostly risen this week in anticipation of Memorial Day demand, catching up with pump prices that have been edging higher for weeks.
“The average retail price for regular gasoline in the United States on May 24, the Monday before the Memorial Day weekend, was $3.02 per gallon, the highest gasoline price before Memorial Day since 2014,” the U.S. Energy Information Administration said in a post.
The EIA also said gasoline prices were up $1.14, or 61%, from a year ago.
West Texas Intermediate crude for July delivery, the benchmark for U.S. oil, fell on Friday for the first time since the week began, sliding 53 cents, or 0.8%, to settle at $66.32.
For the week and month though, WTI rose 4.3%.
Brent crude for July delivery, which acts as the global benchmark for oil, settled Friday’s trading down 74 cents, or 1%, at $68.72.
For the week, Brent was up 3.4% while for May, it rose 2.2%.
The downside in WTI and Brent were limited by U.S. government data on Wednesday showing strong weekly drawdowns in crude, gasoline and distillate stockpiles.
Bets over Memorial Day consumption also helped oil prices offset lingering concerns about a possible surfeit in supplies from Iran entering the market in coming months if Tehran succeeds in clinching a new nuclear deal with world powers that would lift U.S. sanctions on its crude exports.