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Crude oil futures closed slightly higher on Monday (May 23). The expectation that oil demand in the U.S. will increase over the summer is lifting market sentiment. This is the time of year when Americans go on trips.
- WTI crude futures were up 1 cent, or 0.01%, at $110.29 a barrel.
- BRENT crude futures were up 87 cents, or 0.7%, at $113.42 a barrel.
Summertime is just around the corner and with it the travel season especially in the U.S. which is a major consumer of crude oil. Investors expect oil demand in the U.S. to increase during the travel season, which runs from Memorial Day in late May to Labor Day in September.
Crude oil futures are also rising as the European Union (EU) prepares to impose sanctions on Russian oil, meeting at a summit on May 30-31 to discuss the deal.
Meanwhile, investors reacted to the increasing demand for oil in China. Shanghai plans to end closure measures on June 1, and People’s Bank of China is about to launch stimulus measures. These include a 0.15% cut in the five-year prime customer loan (LPR) rate to 4.45% from 4.6%, the biggest cut since 2019.
Investors are watching for the weekly U.S. crude oil inventory report, which the EIA will release on Wednesday.
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Tuesday, May 24, 2022