Advertisement
Singapore markets closed

  • Straits Times Index

    3,290.70
    +24.75 (+0.76%)
     

  • Nikkei

    38,229.11
    +155.13 (+0.41%)
     

  • Hang Seng

    18,963.68
    +425.87 (+2.30%)
     

  • FTSE 100

    8,433.76
    +52.41 (+0.63%)
     

  • Bitcoin USD

    60,936.59
    -2,192.37 (-3.47%)
     

  • CMC Crypto 200

    1,258.81
    -99.20 (-7.31%)
     

  • S&P 500

    5,222.68
    +8.60 (+0.16%)
     

  • Dow

    39,512.84
    +125.08 (+0.32%)
     

  • Nasdaq

    16,340.87
    -5.40 (-0.03%)
     

  • Gold

    2,366.90
    +26.60 (+1.14%)
     

  • Crude Oil

    78.20
    -1.06 (-1.34%)
     

  • 10-Yr Bond

    4.5040
    +0.0550 (+1.24%)
     

  • FTSE Bursa Malaysia

    1,600.67
    -0.55 (-0.03%)
     

  • Jakarta Composite Index

    7,088.79
    -34.81 (-0.49%)
     

  • PSE Index

    6,511.93
    -30.53 (-0.47%)
     

Gasoline: 'Prepare for higher prices in the summer,' analyst says

Ines Ferré
·Senior Business Reporter
Updated ·2-min read

Prepare to pay more at the pump, says one oil analyst.

“I don’t think we’re set up for a quiet, easy-going summer for prices at the pump,” Rebecca Babin, CIBC Private Wealth senior energy, trader told Yahoo Finance.

“I would enjoy it for now, and prepare for higher prices in the summer," she added.

Gas prices are currently hovering around a national average of $3.42 per gallon, down 6 cents from a week ago, and well off the $5 reached last summer.

NANJING, CHINA- FEBRUARY 3, 2023 - A staff member fills up a car at a gas station in Nanjing, Jiangsu province, Feb 3, 2023. The National Development and Reform Commission said that according to recent changes in oil prices in the international market, domestic gasoline and diesel prices will be raised by 210 yuan and 200 yuan per ton respectively from 24 am on February 3, 2023, in accordance with the current pricing mechanism for refined oil products. (Photo credit should read CFOTO/Future Publishing via Getty Images)
NANJING, CHINA- FEBRUARY 3, 2023 - A staff member fills up a car at a gas station in Nanjing, Jiangsu province, Feb 3, 2023. (Photo credit should read CFOTO/Future Publishing via Getty Images) (Future Publishing via Getty Images)

“I think we’re going to see another uptick and potentially a spike over the summer,” said Babin. “The reason for that is that’s going to coincide with when Chinese demand is kind of really ramping.”

ADVERTISEMENT

On Monday Brent futures(BZ=F) were hovering above $86 per barrel while US West Texas Intermediate (CL=F) crude traded above $80 per barrel.

WTI and Brent both gained more than 8% last week, helped by optimism over China’s reopening post-COVID lockdowns.

On Friday, Russia formally announced it would curb production by 500,000 barrels per day starting next month as a form of retaliation against Western sanctions. The move had been previously telegraphed.

“The market was pretty ready for Russia to cut production at the start of 2023,” said Babin.

“The reality is, they’re [Russia] probably having a hard time moving these barrels, and this is because as we moved forward into the February 5th sanction package on Russian products, we’re bumping up onto a smaller market for Russian products, and fewer tankers that can actually ship products,” she added.

Babin says Chinese demand is the main thesis for bullish views on crude oil, though “it’s not linear and it's not quite as fast as the expectation.”

“That doesn’t mean it’s not coming, and I think that it is. But the magnitude and the timing of it is what keeps the market on its toes and trading with a lot of volatility,” said Babin.

Ines is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube