Global benchmark Brent fell for the first time in three weeks.
Oil prices rose about 4 percent on Friday as United States gasoline prices jumped to a record high, China looked ready to ease pandemic restrictions and investors worried supplies will tighten if the European Union bans Russian oil.
Brent futures rose $4.10, or 3.8 percent, to settle at $111.55 a barrel. US West Texas Intermediate (WTI) crude rose $4.36, or 4.1 percent, to settle at $110.49.
That was the highest close for WTI since March 25 and its third straight weekly rise. Brent fell for the first time in three weeks.
US gasoline futures soared to an all-time high after stockpiles fell last week for a sixth straight week. That boosted the gasoline crack spread – a measure of refining profit margins – to its highest since it hit a record in April 2020 when WTI finished in negative territory.
“There has not been an increase in (US) gasoline storage since March,” said Robert Yawger, executive director of energy futures at Mizuho, noting gasoline demand is poised to spike when summer driving season starts on the US Memorial Day holiday weekend.
The US 3:2:1-crack spread, another measure of refining margins that includes gasoline and diesel, rose to a record, according to Refinitiv data going back to May 2021.
Automobile club AAA said US prices at the pump rose to record highs on Friday of $4.43 per gallon for gasoline and $5.56 for diesel.
Oil prices have been volatile, supported by worries a possible EU ban on Russian oil could tighten supplies but pressured by fears that a resurgent COVID-19 pandemic could cut global demand.
“An EU embargo, if fully enacted, could take about 3 million bpd (barrels per day) of Russian oil offline, which will completely disrupt, and ultimately shift global trade flows, triggering market panic and extreme price volatility,” said Rystad Energy analyst Louise Dickson.
This week, Moscow slapped sanctions on several European energy companies, causing worries about supplies.
In China, authorities pledged to support the economy and city officials said Shanghai would start to ease coronavirus traffic restrictions and open shops this month.
“Crude prices rallied on optimism that China’s COVID situation was not worsening and as risky assets rebounded,” said Edward Moya, senior market analyst at data and analytics firm OANDA.
Global shares rose after a volatile week of trading, pushing up stock indexes in the United States and Europe.
Pressuring oil prices during the week, inflation and rate rises drove the US dollar to a near 20-year high against a basket of currencies, making oil more expensive when purchased in other currencies.
The EU said there was enough progress to relaunch nuclear negotiations with Iran. The US said it appreciated the EU’s efforts but said there was no agreement yet and no certainty that one might be reached.
Analysts said an agreement with Iran could add another 1 million bpd of oil supply to the market.