Sonali Paul

MELBOURNE, Reuters – Monday’s early trading session saw oil prices rise due to tight supplies, U.S. fuel demands, and a weaker U.S. Dollar. This is as Shanghai opens its doors after a two month lockdown that raised concerns about a slowdown in economic growth.

U.S. West Texas Intermediate(WTI) crude futures rose 82cs to $113.37 a barrel at 0126 GMT. U.S. futures on futures of U.S. crude oil futures climbed 69cs or 0.6% up to $110.97 a barrel. This adds to the slight gains made last week.

Stephen Innes, managing partner at SPI Asset Management said that oil prices have been supported by tight gasoline markets and strong demand going into peak U.S. driving seasons.

“Refineries typically operate in ramp up mode to satisfy the unquenchable thirst of U.S. motorists at the pumps.”

The U.S. peak driving seasons traditionally begin on Memorial Day weekend in May and end on Labour Day September.

Analysts stated that despite concerns about rising fuel prices potentially reducing demand, the mobility data of TomTom (NASDAQ:) and Google (NASDAQ;) has risen in recent weeks. This indicates more people are on roads in countries like the United States.

In a note, ANZ analysts stated that high frequency data suggested that demand is growing.

On Monday, oil rose due to the weaker U.S. currency. That makes crude more affordable for foreign buyers.

However, market gains were limited by China’s attempts to crush COVID through lockdowns. Even though Shanghai is due to reopen in June 1, there are concerns that China will continue to block the markets.

China’s largest oil importer has caused massive disruptions to industrial output. There have been moves made to boost the economy. Last Friday saw a larger than expected reduction of the mortgage rate.

Moscow has called the invasion of Ukraine a “special operations”. The European Union’s failure to agree on a ban on Russian oil invading Ukraine has prevented prices from rising.