Gasoline price today (June 18): Price increase week

After two weeks of slowing down, oil prices unexpectedly rebounded this week with Brent and WTI both climbing more than 2%.

World oil prices

Many analysts predicted that oil prices would rise this week. However, in the first session of the week, oil prices extended the previous two weeks' losing streak with a shocking drop of nearly 4%. The decline in oil prices was due to Goldman Sachs cutting its oil price forecasts, citing higher-than-expected supplies later this year and in 2024. The bank forecasts Brent crude oil prices in December to fall to $86 a barrel from $95 a barrel previously, and WTI crude to $81 a barrel from $89 a barrel. Concerns about demand growth ahead of key inflation data and a Federal Reserve meeting also pushed oil prices lower.

Gasoline prices have rebounded this week. Illustration: Oilprice

But oil prices failed to sustain the slide into the second session of the following week. Inflation data from the US Labor Department showed that US inflation cooled to its lowest level in more than three years but remained above the Fed's target. The data supported oil prices to rise more than 4%.

The Fed’s decision to keep interest rates unchanged this month did not surprise the market, but signals that the Fed may raise borrowing costs by another 50 basis points later this year as the U.S. economy and inflation cool more slowly than expected sent oil prices back on track. Also contributing to the 1.5% drop in oil prices on Tuesday was a surprise surge in U.S. petroleum reserves.

According to the US Energy Information Administration (EIA), the country's crude oil reserves increased by about 8 million barrels in the week ending June 9, a "huge" increase compared to analysts' forecast of a decrease of 500,000 barrels. Gasoline and diesel inventories also increased more than expected.

In the last two trading sessions of the week, oil prices increased by more than 4% due to the falling US dollar, soaring refining activities in China, and OPEC+ supply cuts.

With three sessions of quite high price increases and two sessions of decline, oil prices this week experienced a week of price increases with Brent oil increasing 2.4% to 76.61 USD/barrel, WTI oil increasing 2.3% to 71.78 USD/barrel.

With the current rise in oil prices, Russian Energy Minister Nikolai Shulginov said it would be realistic to assume that oil prices could reach $80 a barrel.

Gasoline prices are expected to continue rising into next week. Illustration photo: Reuters

The International Energy Agency (IEA) this week increased its forecast for oil demand growth this year by 200,000 barrels per day to 2.4 million barrels per day, bringing total demand forecast to 102.3 million barrels per day. The agency expects economic headwinds to reduce demand by 860,000 barrels per day next year, and the increased use of electric vehicles to reduce demand by 400,000 barrels per day to 105.7 million barrels per day by 2028.

JPMorgan has lowered its forecast for average Brent crude oil prices this year to $81 a barrel.

The Bank of England is expected to raise interest rates by a quarter of a percentage point next week. Comments from Fed officials following the Fed chair's comments on the possibility of further rate hikes later this year will continue to be watched by investors and will also influence oil prices in the new trading week.