Daily Times

Crude oil futures rose on Monday, finding support from tight supplies that have driven fuel prices to record high levels in summer.

As of 1320 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.48 (+0.43 percent) to reach $113.03 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, increased to $110.69 a barrel, up by $0.41 (+0.37 percent).

The price for Opec basket was recorded at $112.04 a barrel against $114.94 a barrel a session earlier, showing a decrease of 2.52 percent. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.

Arab Light was available at $111.46 a barrel with an increase of 1.86 percent and the price of Russian Sokol surged to $100.70 a barrel with a 1.8 percent increase.

Oil prices are supported as gasoline markets remain tight amid solid demand heading into the peak US driving season. Refineries are typically in ramp-up mode to feed US drivers unquenching thirst at the pump.

The Energy Information Administration last week reported that total US motor gasoline inventories decreased by 4.8 million barrels in the week ended May 13 and stood around 8 percent below the five-year average for this time of year. Distillate fuel inventories increased by 1.2 million barrels in the week ended May 13, but remained about 22 percent below the five-year average.

Crude has also been underpinned as China moves toward easing lockdown measures in Shanghai, analysts said. Traders, however, are also watching reports of surging Covid-19 cases in Beijing. where officials extended an order for students and workers to stay home and will carry out more mass testing in the nation’s capital.

Meanwhile, news reports that US President Joe Biden and Saudi Arabia’s Crown Prince Mohammed bin Salman are working towards a meeting could put a lid on crude’s upside. Saudi Arabia has so far resisted the US calls for the Organisation of the Petroleum Exporting Countries and its allies to more aggressively boost output in response to tightening crude supplies.