ISLAMABAD
Crude oil futures rallied for the eighth consecutive day to their highest level since March, as the outlook for oil remains bullish with refined product and gas inventories still tight, the US about to start its summer driving season and looming European ban on Russian oil.
As of 1710 hours GMT on Monday, the price of Brent, the international benchmark for two-thirds of the world’s oil, surged by $0.79 (+0.66%) to $120.22. The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.78 a barrel (+0.68%) to $115.85.
The price for Opec Basket increased from $116.50 to $118.84, showing an increase of $2.34 (+2 %).
The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
The price of Russian Sokol increased to $105.38 a barrel with a 1.76 percent gain and Arab Light prices witnessed an increase of 2.12 percent to reach $116.32 a barrel.
The oil prices went up due to the US Memorial Day holiday weekend, which is the peak US demand season, and as European nations negotiate over whether to impose an outright ban on Russian crude oil. The prices also drew support from strong worldwide demand for fuel. The US driving season and strong travel demand helped prices to rally, as supply growth lags demand growth, the oil market is likely to stay undersupplied, which will help prices to rise in near-term.
On the other hand, the European Union countries are negotiating a deal on Russian oil sanctions that would embargo shipment deliveries but delay sanctions on oil delivered by pipeline to win over Hungary and other landlocked member states. Hungary’s resistance to oil sanctions and reluctance of other countries have held up implementation of a sixth package of sanctions by the 27-member EU against Russia following its invasion of Ukraine. The EU government envoys could reach an agreement in Brussels on Sunday in time for leaders to endorse it at their May 30-31 summit.
