Brent crude oil reached $120 per barrel on Memorial Day—the official kickoff of the summer driving season in the United States.
The Brent Crude July contract was trading at $120.02 (+0.52%) on the day at 10:41 a.m. ET.
It is the highest level for Brent Crude in months, and a nearly $100 per barrel increase from March 2020.
The price of WTI was also rising on Monday, reaching $115.80 (+0.80%) per barrel—also the highest price since March.
Crude prices are continuing to climb despite the EU’s failure to reach any agreement among its members on a Russian crude oil ban, with Hungary still holding out for better terms. While the EU is insistent that it is still likely to reach a deal, the lack of progress made over the weekend was notable.
On the bullish side, Monday kicked off the official start of the driving season in the United States. While the average national gasoline price reached $4.619 per gallon on May 30—the highest level ever recorded, there does appear to be some demand destruction for the fuel, with GasBuddy data showing that weekly U.S. gasoline demand rose by just .5 percent compared to the previous week and only 1.2 percent above the average of the last four weeks—not impressive for Memorial Day weekend.
Other bullish factors for oil are China’s relaxed Covid-19 restrictions and the UK’s recent oil and gas windfall tax, which some analysts and oil companies suggest will stifle new investments in the industry. On Friday, BP said it would review its projects in the country in light of the new tax. Regardless of the long-term effects of such a tax, it creates uncertainty in the market.
By Julianne Geiger for Oilprice.com