Oil prices went up on Monday, thanks to strong demand in the US, limited supply, and a slightly weaker dollar. This happened as Shanghai got ready to reopen after being closed for two months, which made people worry that growth would slow down a lot.
At 04:08 GMT, Brent crude futures had gone up 72 cents to $113.27 a barrel, while WTI crude futures had gone up 53 cents, or 0.48 percent, to $110.81 a barrel. This was on top of the small gains that both commodities had made over the past week.
Stephen Innes, a managing partner at SPI Asset Management, said, “Oil prices are going up because gasoline markets are still tight and demand is strong as we head into the busiest driving season in the U.S.”
“Refineries are usually in the process of ramping up to meet the insatiable thirst of U.S. drivers at the pump.”
In the United States, Memorial Day weekend in late May and Labor Day in September are usually the busiest times to drive.
Analysts said that mobility data from TomTom and Google had gone up in the past few weeks, which showed that more people were on the roads in places like the United States, despite fears that higher gas prices would make people less likely to drive.
Oil prices went up on Monday because the US dollar got weaker, which makes oil cheaper for people with other currencies.
Even though Shanghai is getting ready to start trading again on June 1, market gains have been slowed by worries that China will use lockdowns to kill COVID.
Lockdowns in China, which is the biggest oil importer in the world, have hurt industrial output and construction. This has forced the government to take steps to boost the economy, such as lowering mortgage rates more than expected last Friday.
“COVID-19 lockdowns are a temporary drag on demand in China, but demand is still strong everywhere else,” ANZ analysts wrote in a note.
“As the stimulus measures take effect, we expect industrial activity to pick up,” ANZ said.
Oil prices haven’t gone through the roof because the European Union hasn’t been able to agree on a firm ban on Russian oil because of Russia’s invasion of Ukraine, which Moscow calls a “special operation.”