Oil Prices Increase 4% On Day, Cost Of Fuel In US Remains At Record Highs

NEW YORK (UrduPoint News / Sputnik - 14th May, 2022) Crude prices jumped 4% on Friday but showed little weekly changes after accounting for sharp losses at the start of the week.

The London-traded Brent, the global benchmark for crude, settled at $111.55 a barrel, up $4.10, or 3.8%, on the day. For the week, it was down 0.7%.

Brent rallied on reports that China might start easing up soon on coronavirus lockdowns in Shanghai, which has seen limited economic activity over the past seven weeks from strict movement curbs placed by the authorities.

Gains in Brent were, however, capped by the European Union's continued delay in reaching consensus for a ban on Russian oil, particularly after resistance from Hungary, which fears finding itself in an energy crisis without supplies from Moscow.

New York-traded West Texas Intermediate (WTI), the benchmark for US crude, settled at $110.49, up $4.36, or 4.1%. For the week, it rose 0.7%.

WTI rallied on an apparent crunch in US oil refining capacity, which has sent pump prices of fuel to record highs this week, with diesel reaching all-time highs above $6 a gallon and gasoline record highs above $4.

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The divergence between Brent and WTI is "a story of two oils," energy hedge fund Again Capital partner John Kilduff said.

"The holdout on an European embargo of Russian oil, particularly by Hungary, is limiting Brent's upside, while WTI is basking in bullish glory from the refining crunch in fuels that's sent US pump prices to record highs," Kilduff said.

The International Energy Agency, however, cautioned on Thursday that soaring prices at the pump and slowing economic growth are expected to significantly curb the demand recovery for oil through the remainder of 2022 and next year.

Economists also warn that the recovering US economy could head for recession from runaway inflation and aggressive interest rate hikes by the Federal Reserve.�