Crude oil prices has remained over $105 a barrel as investors weighed increased demand for refined goods against a series of Chinese city lockdowns.
At 9:36 a.m. in Singapore, West Texas Intermediate (WTI) for June delivery rose 22 cents to $105.39 a barrel on the New York Mercantile Exchange.
After finishing 0.4 percent higher on Monday, Brent for July delivery climbed 0.1 percent to $107.71 a barrel on the ICE Futures Europe platform.
After finishing 0.5 percent higher on Monday, WTI futures were barely changed in early Asian trade. Fuel exports from the US Gulf Coast are at an all-time high, depleting local supplies and pushing diesel margins to new highs.
The shortage reflects increased worldwide demand for fuels, particularly from Latin America, as supply remains low due to Russian shipments being shunned.
Since Russia’s invasion of Ukraine in late February, oil has been undergoing a volatile trading phase. Prices initially fell on Monday as Beijing and Shanghai adopted strict steps to curb a large Covid-19 outbreak, raising demand fears. By the end of the year, the European Union is expected to propose a ban on Russian imports.
“Record gasoline exports from the United States are now boosting oil prices, but this is most likely a transitory issue,” said Will Sungchil Yun, a senior commodities analyst with VI Investment Corp. in Seoul, over the phone. “The market will be shaken by the threat of a Russian import restriction, as well as China’s Covid Zero plan, which will have a longer-term influence on pricing.”
Crude prices rose for the sixth month in a row in April, the longest winning streak since January 2018. Concerns about an economic downturn, stubbornly rising inflation, and Federal Reserve officials’ increasingly aggressive tightening language have continued to upset the market, leaving prices exposed to large swings.
Brent continues in backwardation, a bullish pattern in which futures with shorter maturities are more costly than those with longer maturities. On Monday, the benchmark’s prompt time spread ended in backwardation at $1.56 a barrel, down from a high of $3.88 on March 8.