Gasoline price today (June 26): Turning around to accelerate

Oil prices have broken last week's decline and turned slightly higher. Brent crude oil prices rose above $74 a barrel.

World oil prices

Oil markets were in green on the first day of the new trading week. Both Brent and WTI are on the rise, with Brent rising above $74 a barrel and US WTI heading towards $70 a barrel.

Last week, oil prices experienced a bearish week with both Brent and WTI plunging 3.5%, closing at $73.85 a barrel, while WTI fell to $69.16 a barrel.

Oil prices are regaining momentum. Illustration photo: Oilprice

Oil prices fell four times and rose only once in five trading sessions this week. The midweek gain of about 2% was driven by U.S. corn and soybean prices rising to multi-month highs on expectations that global crop shortages could reduce biofuel blends and boost oil demand. Prices were also supported by a weaker dollar after Federal Reserve Chairman Jerome Powell suggested the central bank was close to achieving its policy goals.

In the remaining four trading sessions, the first two and the last two, oil prices plummeted, maintaining a "red floor" status. Factors causing oil prices to slide include concerns surrounding China's unrecovered economy , uncertain demand in this country, rising gasoline reserves in the US, and especially the unexpected interest rate hike by the Bank of England.

Data showed that Chinese refiners added about 1.77 million barrels per day of crude to their inventories last month, the highest level since July 2020. The buildup came as refineries entered the peak of spring maintenance, bringing the total amount of crude in China’s storage tanks to nearly 1 billion barrels.

Meanwhile, industrial output and retail sales growth in China in May fell short of forecasts, requiring Beijing to do more to boost the recovery from the pandemic.

Major banks have also lowered their forecasts for the East Asian nation’s GDP growth for the year. Japan’s Nomura Bank cut its forecast for China’s GDP growth for the year from 5.5% to 5.1%, following similar moves by UBS, Standard Chartered, Bank of America and JPMorgan. The banks now expect China’s GDP to grow between 5.1% and 5.7% in 2023, down from a previous range of 5.5% to 6.3%.

Gasoline prices continue to fluctuate. Illustration photo: Reuters

Oil prices plunged as much as 4% after the market digested the Bank of England’s decision to raise interest rates by double the expected level to 5%. The bank raised interest rates by 50 basis points instead of 25 in an effort to curb inflation, which remains high in the UK (8.7% in May).

According to Oilprice , WTI oil prices are trading below $70/barrel, prompting traders to buy in. This could cause oil prices to recover briefly before continuing to fall.