Oil climbs as global refining crunch drives record fuel costs

Oil climbed as a global squeeze on refined products continued to pull fuel prices higher with Russian diesel exports falling sharply.

West Texas Intermediate rose 4.1 per cent on Friday and eked out a weekly gain of 0.7 per cent after a series of tumultuous trading sessions where lowered liquidity exacerbated price moves. Diesel exports from Russia dropped in April from their prewar level as oil buyers seek to punish one of the world’s biggest suppliers. Investors have also been keeping a close eye on China as authorities in Beijing denied rumors that the city will go into lockdown even as new COVID-19 cases climbed.

Fuels are currently the bullish driver for crude, especially as Russian diesel exports drop, said Dennis Kissler, Senior Vice President of Trading, BOK Financial. “The path of least resistance still looks higher for all petroleum products as demand continues to outstrip supplies.”