Brent crude futures briefly reached a five-month high overnight before easing. Energy Secretary Chris Wright says US gasoline and diesel prices peaked weeks ago, while refined-product supply stays constrained.
Brent crude futures briefly hit $109.99 a barrel in overnight trading before retreating from five-month highs. Signs of recovering Middle Eastern supply offset renewed attacks on energy infrastructure and critical maritime shipping lanes.
Wright said Gulf oil flows had recovered to about 80% of pre-conflict levels. However, refined-product shipments remained heavily constrained amid a global refining crisis, which Ukraine's persistent attacks on Russian refineries compounded.
Wright says pump prices have peaked
ABC News quoted Wright on Sunday saying gasoline and diesel prices had peaked. According to ABC News: "Both gasoline and diesel prices peaked a few weeks ago", Wright said, adding that the US wants them to pull back a lot more.
AAA data show the national average for diesel stood at around $6.319 a gallon on Sunday, down from the previous record high of $6.50. Regular gasoline slid from the $4.50 level to $4.295 by Sunday, still above the politically sensitive $4 level.
Separately, Wright told Fox News that Trump administration officials were discussing releases of diesel stockpiles in coordination with European allies.
Analysts see limited room for relief
June Goh, a senior oil market analyst at Sparta Commodities SA, told Bloomberg that markets seem unwilling to absorb higher prices because the rest of the economy does not look rosy. She added that Brent crude is likely to remain around $100.
Last week, the International Energy Agency reinforced Goldman Sachs analyst Nikhil Bhandari's warning that there is no quick relief at the pump. The refining crisis, particularly in diesel, will persist well into next year.
Source: Oilprice.com
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