With the U.S. economy recovering from the pandemic, more drivers are taking to the roads and stockpiles are drawing. Monday marks Memorial Day in the U.S., a holiday weekend that sees the start of the summer driving boom in the U.S. WTI is $67.21; Brent is $69.72.
The drop in prices on Thursday came despite more evidence that the recovery in U.S. oil consumption is gathering pace as the pandemic fades. American drivers continue to travel almost as many miles as they did in 2019, while stockpiles of crude and gasoline fell last week. JPMorgan Chase & Co. expects prices to hit $80 by the end of the year, analysts wrote in a note. WTI is $65.70; Brent is $68.38
After selling off last week on the prospect of renewed supply from Iran, crude has recovered in recent days. There are signs of healthy demand in the U.S., China, and Europe, despite parts of Asia facing a comeback of Covid-19. A key gauge in the American physical market signals that traders are bracing for a potential supply crunch ahead of the busy U.S. summer driving season. WTI is $65.80; Brent is $68.53
The uneven demand growth is highlighted by improving mobility in the U.S. and Europe. A traffic sample of 15 European cities showed the most congestion since March 2020 last week. U.S. virus cases are falling and the upcoming Memorial Day break, a three-day weekend for many, marks the start of the nation’s summer driving season. WTI is $65.89; Brent is $68.41
West Texas Intermediate was 2% higher, after rising on Friday. Iran said there are differences in when parties will return to compliance with the original nuclear agreement. The market is anticipating Iranian supply will return by late summer, it is also underestimating the upcoming recovery in demand, Goldman Sachs said in a note. Prices are on track to hit $80 this summer, it said. WTI is $64.59; Brent is $67.58
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