Trading volumes in US crude futures were well below normal on Friday ahead of the US Juneteenth holiday on Monday.
Russia’s invasion of Ukraine has compounded global price increases and helped to drive up the cost of everything from food to fuels. US retail gasoline prices have repeatedly broken records and the national average recently topped $5 a gallon. The White House is weighing limits on fuel exports to try to alleviate the pain at the pump.
“Oil markets have focused on macro this week,” said Keshav Lohiya, founder of consultant Oilytics. “However, we wonder what 25 basis point or even 50 basis point increases will do when the bulk of the inflation is coming from commodities.”
Crude is still up more than 50% this year as rebounding demand combined with upended trade flows following Russia’s invasion of Ukraine to squeeze the market. All commodity price moves have become more extreme as market liquidity has slumped and if crude comes under Western secondary sanctions oil could spike sharply higher, JPMorgan Chase & Co. analysts including Natasha Kaneva wrote in a report.
As the war in Ukraine continues, the focus remains on the extent to which Russian oil flows will be altered. On Friday, the country’s Deputy Prime Minister Alexander Novak said throughput at the nation’s refineries could fall 10% this year.