U.S. crude futures may draw some support this week from signs of improving gasoline demand and a pick-up in U.S. refinery activity, CNBC’s latest survey of market professionals showed — although a record supply overhang may restrain any move higher.
Gasoline prices have now increased for 12 weeks in a row, gaining nearly 43 cents, or about 13 percent, since the beginning of February, according to the Lundberg survey released on May 4. Refineries operated at 92.9 percent of capacity for the week ended April 25 and latest data this week may show a 0.5 percentage point increase during the week ended May 2, according to energy information provider Platts.
“Last week, we saw gasoline production hit a record 10 million barrels a day in the U.S. and as we struck another month of near-record auto sales, demand will not be denied despite fuel efficiency,” said Carl Larry, president of Houston-based consultancy Oil Outlooks and Opinions.
“Refineries should edge up a notch and we will probably see an easing of crude oil imports to the U.S.,” said Larry, who holds a bullish view on WTI futures for this week. “That’s going to help erase some of the record crude inventories and give life to WTI back above $100.”
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