ArathySomasekhar

HOUSTON (Reuters – Oil prices rose Wednesday in the early trading session, boosted both by tight supply and increased demand for the upcoming U.S. summer driving seasons.

By 0020 GMT, July futures rose 0.4% or 46 cents to $114.02/barrel. U.S. West Texas Intermediate crude futures were up 0.5% to $110.35 per barrel for July delivery.

Brent was up 0.1% while WTI lost 52 cents on Tuesday.

France’s newly appointed foreign minister spoke out Tuesday to express optimism that people still opposing a European Union sanction package to eliminate Russian oil imports could be persuaded, and that the bloc would reach a deal which would tighten the global supply.

On Tuesday, a Biden administration official went to India to meet with private industry executives and officials about U.S. sanction on Russia for its invading of Ukraine. The Treasury Department stated that this was to ensure India does not increase its oil imports from Russia. Moscow describes its actions in Ukraine as a “special military operation.”

As supply could decrease, U.S. Memorial Day Weekend travel will be busiest since two years. This is because more Americans drive and get rid of coronavirus restrictions.

According to American Petroleum Institute statistics, stocks increased by 567,000 barrels over the week. However, gasoline inventories decreased by 4.2 millions barrels, according market sources. Stocks of distillate also fell by 949,000 barrels. [API/S]

The U.S. government released data on stocks on Wednesday. In a Reuters poll of analysts, they expected U.S. crude and gasoline inventories would fall last week. However, distillate stockspiles were increased. [EIA/S]

China has increased its quarantine effort to contain the COVID virus outbreak. Shanghai will maintain most of its restrictions until June 1st, when it plans to remove all but the last two months.