Oil futures were mixed early Thursday, with bulls taking a breather after crude ended the previous session at three-month highs.
- West Texas Intermediate crude for July delivery CL00, -0.92% CL.1, -0.92% CLN22, -0.92% was off 5 cents, or 0.1%, to $121.06 a barrel on the New York Mercantile Exchange.
- August Brent crude BRN00, -0.33% BRNQ22, -0.33%, the global benchmark was up 4 cents, or less than 0.1%, at $123.62 a barrel on ICE Futures Europe. Both WTI and Brent ended Wednesday at their highest since March 8.
- Back on Nymex, July gasoline RBN22, +0.74% rose 0.4% to $4.239 a gallon, while July heating oil HON22, +2.11% wwas falt at $4.3154 a gallon.
- July natural gas NGN22, +2.72% declined 5.2% to $8.245 per million British thermal units.
Strong U.S. gasoline demand remains a driver for oil futures, analysts said. The Energy Information Administration on Wednesday reported that gasoline inventories fell by 800,000 barrels last week, with implied demand jumping even as pump prices hit records.
With summer driving season under way in the U.S., analysts said oil was likely to remain underpinned by tight product inventories.
“The CEO of the commodities trader Trafigura believes that the oil price could possibly reach $150 per barrel in the near future. The energy minister of the United Arab Emirates expressed a similar view, saying that he believes that oil prices are nowhere near their peak yet. It is no surprise then that market participants are driving prices ever higher in their exuberance,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note.
He warned against undue exuberance, however. “This is not generally the way to create a healthy basis for a longer-term development, however, so we would warn against simply perpetuating the current upswing,” Fritsch wrote, arguing that the reaction to Wednesday’s EIA data, in which traders latched on to the modest decline in gasoline inventories while ignoring a rise in crude and distillate stocks, demonstrated how market participants are paying heed only to bullish news developments at the moment.
Meanwhile, crude was shaking off new COVID-19 lockdowns in Shanghai. Oil was supported earlier in the week as Shanghai and Beijing began to lift some restrictions.