Business

Oil prices consolidate after hitting 3-month highs

Oil futures were mixed early Thursday, with bulls taking a breather after crude ended the previous session at a three-month high.

price action
  • West Texas Intermediate Crude Oil for July Delivery CL00,
    -0.19%

    CL.1,
    -0.19%

    CLN22,
    -0.19%
    was down 5 cents, or 0.1%, on the New York Mercantile Exchange to $121.06 a barrel.

  • August Brent Crude Oil BRN00,
    -0.15%

    BRNQ22,
    -0.15%,
    the global benchmark rose 4 cents, or less than 0.1%, on ICE Futures Europe to $123.62 a barrel. Both WTI and Brent ended Wednesday at their highest levels since March 8th.

  • Back on Nymex, July Gasoline RBN22,
    +0.28%
    rose 0.4% to $4.239 a gallon during July heating oil HON22,
    +0.42%
    wwas flat at $4.3154 per gallon.

  • July natural gas NGN22,
    -4.98%
    down 5.2% to $8.245 per million British thermal units.

market leader

Strong US gasoline demand remains a driver for oil futures, analysts said. The Energy Information Administration reported on Wednesday that gasoline inventories fell 800,000 barrels over the past week, with implied demand soaring even as pump prices hit records.

With the US summer driving season underway, analysts said oil is likely to remain supported by tight product inventories.

“The CEO of commodities trader Trafigura believes oil prices could potentially reach $150 a barrel in the near future. The Energy Minister of the United Arab Emirates made a similar statement. He believes that the price of oil has not yet peaked. So it’s no wonder that market participants, in their enthusiasm, keep driving prices up,” said Carsten Fritsch, commodity analyst at Commerzbank, in a statement.

Keywords: Oil prices could become “parabolic” and put the global economy in a “critical situation,” says Trafigura boss

However, he cautioned against over-exuberance. “However, this does not create a healthy basis for longer-term development, so we warn against simply continuing the current upswing,” wrote Fritsch, explaining the reaction to Wednesday’s EIA data, which traders held on to to the point of slight Falling gasoline inventories while ignoring increases in crude oil and distillate inventories showed that market participants are only paying attention to bullish news developments for the moment.

Meanwhile, crude oil shrugged off fresh COVID-19 lockdowns in Shanghai. Oil was supported earlier in the week as Shanghai and Beijing started lifting some restrictions.

https://www.marketwatch.com/story/oil-prices-consolidate-after-hitting-3-month-highs-11654774432?rss=1&siteid=rss Oil prices consolidate after hitting 3-month highs

Brian Lowry

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