Oil leaps to 13-week high on rising gasoline demand

Crude oil prices jumped over 2% to a 13-week high on Wednesday as US demand for gasoline keeps rising despite record pump prices, while expectations that China’s oil demand will increase faced growing supply concerns in several countries, including Iran.

Analysts have said a nuclear deal with Iran could add about 1 million barrels per day (bpd) of crude to world supply. Brent futures rose $3.01, or 2.5%, to settle at $123.58 a barrel, while US West Texas Intermediate (WTI) crude rose $2.70, or 2.3%, to end at $122.11.

Iran said it was removing two International Atomic Energy Agency surveillance cameras at a uranium enrichment facility as the board of the United Nations’ nuclear watchdog passed a resolution criticizing Iran for failing to fully explain uranium traces at undeclared sites.

The move has raised tensions with the United States and other countries negotiating with Iran over its nuclear program, and will likely keep sanctions in place and Iranian oil out of the global market for longer.

Those were the highest closes for both Brent and WTI since March 8, which were their highest settlements since 2008.

US commercial crude oil inventories rose unexpectedly last week, while crude in the Strategic Petroleum Reserve (SPR) fell by a record amount as refiners’ inputs rose to their highest since January 2020, the Energy Information Administration said.

US gasoline stocks fell by a surprise 800,000 barrels as demand for the fuel rose despite sky-high pump prices.