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Oil started the week stable: on ICE, Brent front month price went 0.7% up to $113.42/b. On NYMEX, WTI for July delivery was stable: settling $0.01 higher at $110.29/b.
Lingering worries about the state of the economy in the coming months, with a risk of recession that would reduce oil demand, moved prices lower.
However, strong gasoline cracks supported oil prices. In particular, investment bank JP Morgan forecasts the US average price for a gallon of gasoline will reach $6.20 at the end of this summer. Yesterday, the US average gasoline price stood at $4.60/gal making a 12% monthly gain and a 51% yearly gain. For more details on gasoline see Macro & Oil Weekly Report. To tame skyrocketing product prices, the Biden administration is considering a plan to release diesel barrels from the Northeast Home Heating Oil Reserve, were 1mb are stored.
Gasoline prices in the US
Shanghai is continuing to remove sanitary restrictions with no major setbacks so far. All restrictive measures should be removed by June 1st. But, in Beijing the number of daily cases reached 99, the highest level since the start of the outbreak.
This morning, growth concerns drive oil in red territories: -1.4% for NYMEX WTI and -1.4% as well for ICE Brent.
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