Oil futures ended higher Friday, posting a strong weekly gain, as the European Union made progress toward a ban on imports of Russian crude and gasoline futures surged to a record.
Price action
- West Texas Intermediate crude for June delivery CL.1, +1.86% CL00, +1.86% CLM22, +1.86% rose $ 1.51, or 1.4%, to close at $ 109.77 a barrel on the New York Mercantile Exchange, for a 4.9% weekly gain.
- July Brent crude BRN00, +0.34% BRNN22, +0.34%, the global benchmark, rose $ 1.49, or 1.3%, to end at $ 112.39 a barrel on ICE Futures Europe, up 4.9% for the week.
- June natural-gas futures NGM22, -9.07% retreated more than 8% to close at $ 8.043 per million British thermal units. The contract jumped 4.4% to close at $ 8.783 per million British thermal units on Thursday, its highest finish since Aug. 1, 2008.
- June gasoline RBM22, +3.18% jumped 2.7% to close at a record $ 3.759 a gallon, while June heating oil HOM22, -1.15% fell 2.2% to $ 3.9543 a gallon.
Market drivers
The EU earlier this week proposed a phaseout of imports of Russian energy that would take effect within six months. The plan, which must be approved by all 27 members, still faces hurdles, with Hungary demanding more time and EU money to smooth the transition, according to The Wall Street Journal.
“Crude prices just want to head higher as energy traders completely fixate over the looming European sanctions on Russian oil. ? No one wants to be on the wrong side of a major crude supply disruption headline, so whatever oil price dips that happen will be short-lived,” said Edward Moya, senior market analyst at Oanda, in a note.
Meanwhile, the Biden administration’s announcement on Thursday that it was looking to take bids this fall for crude to refill the StrategiPetroleum Reserve beginning in late 2023 also helped underpin prices, said Ole Hansen, head of commodity strategy at Saxo Bank.
In Brent, the next level of resistance is the April high around $ 115 with support at $ 110, he said.
Oil futures remained higher even after Baker Hughes said the number of U.S. oil rigs rose by 5 this week to 557, while gas rigs were up 2 to 146. A strong performance for fuel products was also helping to lift crude, with support tied to tight inventories.
See: Senate panel advances anti-OPEC bill, as Democrats ‘increasingly threatened by inflation’
“Gasoline storage has been lower for five weeks in a row…every week in April… and 12 of the past 13 weeks, including a huge 3.6 million [barrel] draw on April 8, and another big draw of 3.6 million barrels on March 11,” said Robert Yawger, executive director of energy futures at Mizuho Securities.
Gasoline in storage, as measured by the Energy Information Administration, is usually building this time of year in anticipation of summer driving season, he noted.
Read: This trader predicted the bond meltdown, tech selloff and oil’s surge. She sees $ 260 oil within a year.