Oil prices rose nearly 4 percent on Friday as US gasoline prices jumped to an all-time high, and stock markets rallied on fears of tighter supplies if the European Union bans Russian oil after Moscow imposed sanctions on European units of state-owned Gazprom.
Brent crude futures rose $3.97, or 3.7 percent, to $111.42 a barrel by 12:32 pm ET (1632 GMT), while US West Texas Intermediate crude rose $4.38, or 4.1 percent, to $110.51.
US gasoline futures rose to an all-time high, boosting the spread of gasoline cracks – a measure of refining profit margins – to their highest since hitting a record in April 2020 when West Texas Intermediate crude settled into negative territory.
U.S. crack prevalence rose 3:2:1, another measure of refining margins that includes both gasoline and diesel, to a record high, according to Refinitiv data going back to May 2021.
The AAA Automobile Club said pump prices in the United States rose to record levels at $4.43 per gallon for gasoline and $5.56 for diesel.
WTI was on track to record its highest close since March 25th and its third weekly rise. However, Brent crude remained poised to record its first weekly decline in three weeks.
Oil prices have been volatile, buoyed by concerns that the European Union’s ban on Russian oil could tighten supplies, but they are under pressure from concerns about the spread of the COVID-19 pandemic or other factors that could reduce global demand.
The Rystad Energy analyst said: “The EU ban, if fully implemented, could take about 3 million barrels per day (bpd) of Russian oil offline, completely disrupting, and ultimately diverting global trade flows, leading to market panic. extreme price volatility. Louise Dixon.
This week, Moscow imposed sanctions on the owner of the Polish part of the Yamal natural gas pipeline that transports Russian gas to Europe, as well as the former German unit of Russian gas producer Gazprom, whose subsidiaries serve gas consumption in Europe.
In China, stocks rose as authorities pledged to support the economy and city officials said Shanghai will steadily begin easing restrictions on traffic due to the coronavirus and open stores this month.
Stephen Innes, managing partner of SPI Asset Management, said in a note that oil traders were looking for “a glimmer of light at the end of China’s grim closing tunnel.”
“However, we consistently end up in square one with lowercase counts weighted against authorities doubling down on their zero COVID policy,” Innes added.
Global stocks rose on Friday and investor sentiment stabilized after a volatile week of trading, which helped lift stock indexes in the United States and Europe.
The pressure on oil prices during the week, pushed inflation and price hikes in the US dollar to a nearly 20-year high against a basket of other currencies, making oil more expensive to buy in other currencies.
The European Union said that sufficient progress had been made to resume nuclear negotiations with Iran. Analysts said an agreement with Iran could add another million barrels of oil supplies to the market.
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