ExxonMobil CEO expects tight oil market to last for several years, Vitol CEO says tightening market will continue until demand slows.
June 21 (Reuters) – Oil prices rose about 1 percent on Tuesday on strong summer fuel demand, while supplies remained tight because of sanctions imposed on Russian oil following its invasion of Ukraine.
Brent crude was up 68 cents, or 0.6%, at $114.77 a barrel by 12:10 p.m. ET (1610 GMT). U.S. West Texas Intermediate (WTI) crude for July delivery, which expires on Tuesday, rose $1.34, or 1.2%, to $110.90.
Both benchmarks posted weekly declines last week. It was the first weekly decline in eight weeks for WTI and the first in five for Brent.
The 50-day simple moving average for U.S. front-month futures hit its highest since 2008, while Brent hit its highest since 2013.
U.S. crude and gasoline inventories likely fell last week, while distillate inventories rose, a preliminary Reuters poll showed.
On the demand side, UBS analyst Giovanni Staunovo said that despite concerns about economic growth, data continued to show solid demand for oil.
“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. We continue to expect higher oil prices as supply growth lags demand growth in the coming months,” he said.
On Monday, U.S. President Joe Biden said a decision on whether to suspend the federal gasoline tax could be made this week. U.S. Treasury Secretary Janet Yellen said on Monday that the United States is also in talks with Canada and other allies to further limit Moscow’s energy revenue by imposing a price cap on Russian oil.
EU leaders aim to keep pressure on Russia at this week’s summit by pledging further sanctions work, a draft document shows.read more
“Supply concerns are unlikely to subside unless the Russia-Ukraine war is resolved or we see a significant increase in supply from the U.S. or OPEC,” said Madhavi Mehta, a commodities research analyst at Kotak Securities.
souce of the news:reuters
