Oil Futures Edge Higher on Ukraine, Driving Demand

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Oil Futures Edge Higher on Ukraine, Driving Demand

Oil prices edged higher on Friday amid hopes of soaring demand as the market approaches the summer-driving season and tensions in Ukraine intensified.

The June delivery West Texas Intermediate (WTI) added 52 cents from the previous day to close at $102 a barrel. The per-barrel price of Brent North Sea crude for July delivery was $109.75 in London.

As Channel News Asia reports, the oncoming US summer season will experience increased driving, in essence supporting oil prices.

Prices of gasoline jumped alongside those of Brent as markets anticipated a shortfall of supplies due to escalating violence in Ukraine. The futures added as much as 0.7%.

NATO Secretary General Anders Fogh poured cold water on Russia’s assurances that the country did not intend to invade Russia, in the wake of rising tensions towards Ukraine’s presidential election scheduled for May 25.

“Today I think we’re reflecting the Brent market. It looks like gasoline is just bouncing off Brent, a little of WTI as well. Expiring June Brent yesterday was much stronger than what anybody had thought,” Andrew Lebow of New York-based Jefferies Bache LLC told Bloomberg.

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The price of gasoline for June delivery was $2.971 per gallon as of 10:43 am after adding 0.68 cents on the New York Mercantile Exchange.

Gasoline’s crack spread in relation to WTI crude thinned 13 cents to $22.87 per barrel. Gasoline’s premium to Brent dropped 14 cents to $14.47.

Data from AAA in Heathrow, Florida, showed that US pump prices stood at $3.648 per gallon after increasing 0.7 cents. Prices have surged 4.7% from a year earlier.

June-delivery ultra low sulfur diesel climbed 1.17 cents or 0.4% to $2.9623 per gallon.

Diesel’s crack spread compared with WTI crude was flat at $22.43 for every barrel. The premium to Brent crude of the motor vehicle’s fuel reduced 11 cents to $14.50.

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To contact the reporter of this story; Jonathan Millet at john@forexminute.com