Oil prices rise, dollar edges up as US driving season peaks

Oil futures tilted higher in Asian trade as the dollar index edged up from April 26 lows, ahead of US data alter today, while markets price in latest developments in China, and Saudi Arabia's Aramco's warnings of global supply shortages.

Europe is once more considering the concept of banning Russian oil supplies in a few days according to official statements by Germany's government. 

As of 05:57 GMT, US crude futures due in June rose 0.22% to $110.93 a barrel, while Brent July futures added 0.10% to $114.57 a barrel, as the dollar index rose 0.16% to 102.20.

From the US, GDP is expected to contract by 1.3% in the first quarter, compared to a 7% expansion in the previous quarter.

US unemployment claims are expected down a thousand to 217 thousand in the week ending May 21, while continuing claims are expected down 7 thousand to 1.31 million.

US existing home sales are expected down 1.9% in April, compared to a 1.2% drop in March.

Official US data showed crude stocks fell a million barrels to 419.8 million barrels last week, while analysts expected a drop of 2.2 million barrels.

Gasoline stocks fell 0.5 million barrels to 219.7 million, while distillate stocks rose 1.7 million barrels to 106.9 million barrels.

Chinese Economy

China is starting to loosen up restrictions on movements in major cities as Covid 19 infections decline, while China's central bank took a bold move and cut interest rates to bolster economic activities.

Shanghai, a 25 million people city, is preparing to return to normal life by June 1.

Otherwise, the People's Bank of China cut five-year interest rates for loans by 15 basis points to 4.45%, the largest such decrease since 2019.

The Financial Times reported this weekend that Saudi Arabia will continue to support Russia's roles in the OPEC plus group.

Saudi authorities expressed the importance of separating politics from the OPEC + proceedings, which are meant to organize the global oil market.

The Saudi government noted that in the last three years, the world lost 4 million barrels of refining capacity, 2.7 million from the start of the Covid 19 pandemic, so it's not wise to shut Russia out now.

Baker Hughes data showed US oil rigs rose by 13 rigs last week to 576 rigs, the highest since March 2020 for the ninth straight week, with output rising 100 thousand bpd to 11.9 million bpd.

US production fell 1.2 million bpd, or 10% from a record high at 13.1 million bpd scaled on March 2020.