Crude and Gasoline Prices Surge Amidst Dollar Weakness
May WTI crude oil (CLK24) on Thursday closed up +1.16 (+1.36%), and May RBOB gasoline (RBK24) closed up +3.33 (+1.21%).
Crude and gasoline prices Thursday recovered from early losses and moved higher, with crude climbing to a 5-1/4 month high and gasoline climbing to a 7-month high. Thursday’s slide in the dollar index to a 2-week low was bullish for energy prices.
Geopolitical Risks Prop Up Crude Prices
Heightened geopolitical risks underpinned crude prices after Iran vowed revenge on Israel for an airstrike on its embassy in Syria that killed top Iranian military commanders. This situation raises fears of increased involvement of Iran in the Israel-Hamas conflict. Additionally, the weakness in Japan’s economy, one of the world’s largest crude oil consumers, acted as a bearish factor for oil prices after the Bank of Japan downgraded its economic assessments for several regions.
OPEC+ Decision and Russian Refinery Attacks Impact Crude
Furthermore, OPEC+ maintained its current crude output cuts until the end of June, providing support to oil prices. However, OPEC crude production rose slightly, with Iraq and UAE pumping above their quotas. Ukrainian drone attacks on Russian refineries damaged facilities, limiting Russia’s fuel exports capacity and adding risk premium to oil prices.
Global Supply Disruptions and Chinese Demand Boost Prices
Recent reductions in crude oil floating storage and strong Chinese crude oil demand have contributed positively to prices. Chinese data showed record processing of crude oil and an increase in fuel demand. The ongoing Israel-Hamas conflict and potential spread to Lebanon, as well as destabilizing attacks in Yemen affecting global crude oil supplies, continue to support crude prices.
US Inventory and Rig Data
The latest EIA report indicated that US crude oil inventories are below the seasonal average, while crude oil production remains slightly below record levels. Active US oil rigs have declined over the past year, although recent figures showed a slight increase from the 2-year low recorded in November.
More Crude Oil News from Barchart
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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