Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil Up, Fueled by Continuous Increase in U.S. Fuel Demand

Published 05/27/2021, 10:08 PM
Updated 05/27/2021, 10:14 PM
© Reuters.

© Reuters.

By Gina Lee

Investing.com – Oil was up Friday morning in Asia, ending the week by extending gains from the highest close in more than two years. Optimism as U.S. fuel demand continues to increase gave the black liquid a boost, even as concerns over a potential Iranian supply increase remained.

Brent oil futures were up 0.40% to $69.48 by 10:07 PM ET (2:07 AM GMT), inching towards the $70 mark. WTI futures gained 0.54% to $67.21, after settling at its highest finish since October 2018.

A successful COVID-19 vaccine drive in the U.S. has led to a pickup in fuel demand ahead of the summer driving season that starts over the weekend. Both the American Petroleum Institute and the U.S. Energy Information Administration also reported draws in U.S. crude oil supplies earlier in the week.

Oil is set to report a fourth monthly gain for May, as the fuel demand outlook continues to brighten as some countries, such as the U.S., Europe and China continue their economic recoveries. The number of U.S. initial jobless claims for the week fell to a new 14-month low of 406,000, according to data released on Thursday.

However, investor sentiment continues to be damped by the outbreaks in other countries such as Japan, where a state of emergency covering Tokyo and other key cities is set to be extended until Jun. 20.

Meanwhile, investors also continue to monitor the talks between Iran and other world powers, taking place throughout the week in Vienna. Should both sides revive a 2015 nuclear deal and the U.S. lift its current sanctions against Iran, the latter is predicted to add between 500,000 barrels a day (bpd) and 1.5 million bpd of crude and condensate to the market.

The Iranian supply increase comes just as the Organization of the Petroleum Exporting Countries and allies (OPEC+) is expected to relax its curbs on exports.

OPEC+ ministers will meet on Jun. 1, where it is widely expected that they will ratify an 840,000 bpd increase scheduled for July, the third and final phase of a plan to revive around 2 million barrels of global production over the summer season.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.