Oil rises amid tight supplies and increasing demand

Oil prices rose more than $ 1 on Wednesday, buoyed by tight supplies and the prospect of rising demand from the upcoming start of the summer driving season in the US, the world’s biggest crude consumer.

Brent crude futures for July rose $ 1.38, or 1.2percent, to $ 114.94 a barrel by 5.11am GMT. Brent futures gained 0.1percent on Tuesday and are up for a fifth day. US West Texas Intermediate ( WTI) crude futures for July delivery rose $ 1.35, or 1.2percent, to $ 111.12 a barrel. The contract settled down 52c on Tuesday. Global crude supplies continue to tighten as buyers avoid oil from Russia, the world’s second- largest oil exporter, amid sanctions after its invasion of Ukraine, which Russia calls a “special military operation”. France’s new foreign minister said on Tuesday she was optimistic that those still opposed to a new EU sanctions package that would phase out Russian oil imports to the bloc could be convinced, and that the bloc would strike a deal that would have the effect of curtailing global supply. “With explicit bans on importing Russian crude in the US and UK, and oil companies reluctant to buy even without formal legal obstacles, self sanctions are still causing supply shortages,” said SPI Asset Management managing partner Stephen Innes. Keeping the pressure on Russian supply, a Biden administration official headed to India on Tuesday to talk with officials and private industry executives about US sanctions on Russia, the treasury department said, as Washington seeks to keep India’s purchases of Russian oil from rising.

The crude supply situation is tightening as US Memorial Day weekend travel is expected to be the busiest in two years, causing fuel demand to rise as more drivers plan to hit the road and shake off coronavirus pandemic restrictions despite high fuel prices.