The end of the lockdown in Shanghai drives prices higher

Oil benchmarks started the week on a gain. ICE Brent climbed +2.4% to $114.24/b while NYMEX WTI front month price increased by 3.4% to settle at $114.20/b.

The lockdown in China and the weak economic indicators released yesterday dragged oil, as the economic activity in the country seems more and more gloomy. But the upward pressure was stronger as the situation is clearly improving in Shanghai: the restrictions should end by June 1 as no case was reported for three days in a row in fifteen of the sixteen districts of the city. 

The perspective of a European ban on oil import continued to support prices. The final agreement could be concluded in a few days according to German Foreign Minister. Germany also announced they will stop importing Russian oil by the end of the year, even if the EU ban is less stringent.

NYMEX RBOB Gasoline future reached a new all-time high, to $4.06/gal (see below chart). On the agenda today, the weekly API report should give a new snapshot on gasoline inventory that has been decreasing for several weeks, pushing prices to historic levels.

This morning, oil benchmarks are stable: ICE Brent is down by 0.1%, NYMEX WTI is also down by 0.3%.