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Market News International oil prices narrowed their gains, Biden called for more production, and India gave a "warning line"

International oil prices narrowed their gains, Biden called for more production, and India gave a "warning line"

On Monday (May 23), international oil prices rose, as the United States is about to enter the traditional driving travel season, increasing fuel demand and tight supply. But India's oil minister warned about the side effects of high oil prices, and that oil prices staying at $110 a barrel could pose a bigger threat to the global economy, which limited the rise in oil prices. U.S. President Biden also called on OPEC members to increase production.

2022-05-23
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On Monday (May 23), international oil prices rose, as the United States is about to enter the traditional driving travel season, increasing fuel demand and tight supply. But India's oil minister warned about the side effects of higher oil prices, limiting gains.

At 16:52 GMT+8, NYMEX crude oil futures rose 0.44% to $110.77 a barrel; ICE Brent crude futures rose 0.59% to $113.21 a barrel.


Peak driving season in the U.S. traditionally begins on Memorial Day in late May and ends on Labor Day in September. Despite concerns that soaring fuel prices could dent demand, mobile data from TomTom and Google have climbed in recent weeks, showing more and more people are driving across the U.S.

U.S. President Joe Biden said on Monday that the release of strategic reserves would not be enough to meet demand, and he wanted members of the Organization of the Petroleum Exporting Countries (OPEC) to boost output. America is going through a transition where we will be less dependent on fossil fuels.

Big oil companies generally acknowledge that more drilling means more money to spend. Oil companies don't have much money to invest in new drilling projects, and even Baker Hughes admits the rig count is well below pre-pandemic levels.

“Oil prices were supported as the gasoline market was strong ahead of peak U.S. driving, supplies remained tight, and refineries were typically operating at high capacity to meet U.S. driver demand,” said Stephen Innes, managing partner at SPI Asset Management.

Indian Oil Minister Hardeep Singh Puri said that oil prices staying at $110 a barrel could be a bigger threat to the global economy, "You don't just have to talk about inflation ... that's where the word R (recession) comes from. If the global economy moves in this direction, Everyone, including oil producers, will have to face the consequences of inflation."

Indian refiners are facing huge losses as they fail to pass on higher crude costs to fuel consumers, even as global energy producers posted huge profits in their March quarterly reports.
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