Crude oil prices are set to finish off the week in the green on hopes that China’s zero-Covid policy shedding will mean a boost in economic growth and oil demand—and it’s carrying gasoline prices right along with it.
Brent crude oil was trading up 0.51% on the day at 8:36 am ET at $86.58 per barrel—up from $85.53 this time last week, even as U.S. crude oil inventories saw a second week of large gains. The U.S. crude oil benchmark WTI was also trading up 0.50% at $80.85 per barrel, up from $80.20 this time last week.
Traders appear to be ignoring the fundamentals that saw U.S. crude oil and gasoline inventories balloon for two weeks in a row. Over the course of the last two weeks, crude oil inventories in the United States grew by 27.4 million barrels to 448 million barrels, according to the EIA’s Weekly Petroleum Status Report. For comparison, that’s more than 10 times the build in crude oil inventories throughout last year, even with more than 200 million barrels released from the SPR into that commercial inventory.
The gains in WTI is sending gasoline prices steadily upward, carrying on the trend of recent weeks after prices came down toward the end of 2022 from their summer highs.
While gasoline prices are increasing, so are U.S. gasoline inventories, which gained 7.6 million barrels over the last two weeks alone, according to EIA data, offsetting the 10.1 million barrel inventory decline over the course of 2022.
While the last two weeks were quite bearish based on inventory moves, China’s November crude import data seems to have captured the attention of traders eyeing a quick return to life as normal in China—the world’s largest crude oil importer by far.
Gasoline prices rose to $3.392 per gallon on average on Friday, according to AAA data. That’s up from $3.379 per gallon yesterday and $3.285 a week ago. Gasoline inventories are still 8% below the five-year average.
According to GasBuddy’s Patrick DeHaan, there are only three states left with gas prices below $3 per gallon: Texas, Mississippi, and Oklahoma.