Oil prices climbed in early trade on Wednesday (May 25, 2022), driven by demand growth in the United States.Reuters (May 25, 2022)
According to HOUSTON (Reuters), in the early trade on Wednesday (May 25, 2022), oil prices climbed. Also, by 00:20 GMT, Brent crude futures for July 2022 rose 46 cents to $114.02 per barrel. Also, WTI crude futures jumped 58 cents to $110.35 per barrel. The expectation of increased demand as the summer driving season in the United States is the main driving force behind the increasing prices.
Regardless of the high cost of oil, Memorial day weekend traffic in the United States is expected to be the busiest in two years. This is because more American people take to the road to shake off the effects of the coronavirus outbreak.
Besides that, the Biden administration official went to India on Tuesday (May 24, 2022) to meet with government officials and leaders to talk about U.S. sanctions against Russia for the assault on Ukraine. Washington tries to limit India’s oil buying of Russian oil.
At the same time, France’s new foreign minister expressed confidence that those who remain opposed to a new European Union sanctions package that would phase out Russian oil shipments to the EU could be persuaded. Finally, the group would reach an agreement that would limit global supplies.
In a Reuters poll, analysts predicted that U.S. crude oil and gasoline inventories would decline last week (May 16 – 20, 2022), but distillate inventories would rise.
In short, the rising oil prices and the rising crude futures prices were influenced by the tighter supply. The most excessive point that affects tighter supply is that American people are more likely to travel in the summer driving season.
However, oil prices are not stable. It can increase and decrease anytime. Thus, investors should always follow the economic news around the world. Also, investors should follow the political situation both domestic and foreign. All of them directly affect oil prices.
Read more: Commodities