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21/05/24
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Crude Prices Lower on Inflation, Demand for Gasoline Weak Before Summer Driving Season In US
On Tuesday, crude prices dropped by over 1% with persistent U.S. inflation likely to keep interest rates higher for longer, possibly dampening consumer demand.
Brent crude futures were $1.21, or 1.45% lower at $82.50 per barrel and U.S. West Texas Intermediate crude (WTI) futures for delivery in June, which will expire on Tuesday, were $1.26, or 1.58% lower at $78.54.
The more active contract for delivery in July was $1.09, or 1.37% lower at $78.21.
Higher interest rates lock up funds in a blow to demand for crude and economic growth, as well as diminishing consumer demand at the pump.
The Energy Information Administration (EIA) said in its diesel and gasoline fuel update that despite the run-up to the Memorial Day holiday this weekend, which starts the peak summer driving season in the U.S., retail gasoline prices on Monday dropped for the 4tth straight week to $3.58 per gallon.
On Tuesday, the Department of Energy said that in an effort to ensure sufficient supply to the northeast, the U.S. will sell close to 1M barrels of gasoline in a northeastern state reserve, with bids being due on May 28.
Investors are waiting for Wednesday’s weekly U.S. oil inventory data.
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