Oil Prices Settle Sharply Higher Amid Rising Signs Of Tight Supply

Crude oil prices rose sharply on Thursday amid increasing signs of tight supply in the market ahead of the peak U.S. driving season that kicks off on Memorial Day (May 30).

A weak dollar and the possibility of EU sanctions on Russian oil sales also contributed to the jump in oil prices.

European Council President Charles Michel said on Wednesday that he is confident that an agreement can be reached before the council's next meeting on May 30.

West Texas Intermediate Crude oil futures for July ended higher by $3.76 or 3.4% at $114.09 a barrel.

Brent crude futures closed higher by $3.37 at $117.40 a barrel today.

Data released by U.S. Energy Information Administration (EIA) on Wednesday showed crude stockpiles fell by 1.019 million barrels last week. Gasoline inventories also fell, dropping by 0.482 million barrels, while distillate stockpiles increased by 1.657 million barrels.

Analysts are of the view that demand for fuel will be high as Americans are likely to travel regardless of the price at the pump.

A report from the American Automobile Association says that nearly 40 million people will likely travel 50 miles or more by car over the holiday period, which represents an 8% year-on-year increase in travel.

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