Signs that Americans are driving more is helping lift oil prices, but analysts say a 60% jump in prices in just a week may be too much.
Oil prices have been volatile but mostly higher with a 60% gain in U.S. crude futures in just a week, based on anticipation about supply cuts and a pickup in gasoline demand.
As more than half the states opened up their economies to some degree, U.S. gasoline demand rose in the past week to 6.7 million barrels a day, from 5.9 million barrels the week earlier, according to government data. That's still about 3 million barrels a day below normal. According to OPIS, preliminary data from gasoline retailers shows that drivers have increased their purchases of gasoline. They are still buying 37.7% less than normal, but that's improved from 50%.
Blanch said if the market comes back too fast and prices rise too quickly, U.S. shale producers could ramp up some production, slowing the draining of surplus crude. Prices cratered last month, and futures prices fell deeply into negative territory, as traders reacted to growing oil supplies and a shortage of places to store it.
The U.S. industry was pumping at record levels even in March, while global demand weakened, but before the virus shutdowns brought it to a halt. Production has fallen to 11.9 million barrels a day, from its high of 13.1 million barrels a day in March.
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