The US oil benchmark closes at an 11-week high and the summer driving season is set to begin

Oil futures ended higher on Friday to cap a week of strong price action, with the US benchmark posting its highest result in more than 11 weeks, with the summer driving season set to begin Memorial Day weekend.

price action
  • West Texas Intermediate crude for July delivery CL.1,


    rose 98 cents, or 0.9%, to close at $115.17 a barrel on the New York Mercantile Exchange, the highest close for a front-month contract since March 11, according to Dow Jones Market Data. The US benchmark rose for the fifth straight week, gaining 4.3%.

  • July Brent Crude Oil BRN00,

    the global benchmark rose $2.03, or 1.7%, to $119.43 a barrel on ICE Futures Europe, its highest front-month close since March 25.

  • Back on Nymex, June Gasoline RBM22,
    rose 3.6% to $4.0158 a gallon during HOM22 fuel oil in June,
    rose 0.9% to $4.003 a gallon.

  • July natural gas fell NGN22,
    1.9% to end at $8.727 per million British thermal units.

market leader

A team of commodities analysts at Commerzbank recently upgraded its oil price forecasts for the next three quarters amid growing likelihood of the EU agreeing to an oil embargo on Russian oil.

This will increase demand for non-Russian oil, which should support WTI and Brent prices.

However, they believe that the balance between supply and demand in the oil market will be balanced in the second half of the year despite ongoing supply risks, which is why the team expects oil prices to fall back below $100 a barrel in the second half of 2022.

After the oil market was pushed higher at the beginning of the year, it has calmed down noticeably in the past few weeks. By early March, shortly after Russia’s invasion of Ukraine, Brent crude had risen to nearly $140 a barrel, marking a 13½-year high.

Natural gas prices fell on Friday after hitting their highest level since 2008 earlier this week after the release of inventory data from the Energy Information Administration showing a sharp drop in inventories.

As the US Memorial Day weekend marks the start of the summer driving season, the next near-term catalyst for energy markets is expected next week when oil ministers who are members of the Organization of Petroleum Exporting Countries, as well as officials from countries such as Russia, which are more recently members of OPEC connected will hold a virtual meeting to discuss production plans. The US oil benchmark closes at an 11-week high and the summer driving season is set to begin

Brian Lowry

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