Oil futures ended slightly lower Tuesday after U.S. Energy Secretary Jennifer Granholm was reported saying the Biden administration hasn’t ruled out a ban on petroleum exports.
June natural-gas futures
finished with a gain of 0.6% at $8.796 per million British thermal units.
Granholm, speaking to reporters in Louisiana, was asked if the Biden administration was weighing restrictions on petroleum exports to put a lid on gasoline and diesel prices. “I can confirm the president is not taking any tools off the table,” Granholm said, according to Reuters.
Oil has found support on optimism around plans to unwind lengthy lockdowns in Shanghai, China’s largest city, but uncertainty lingers over crude demand from the world’s largest oil importer as Beijing increased quarantine efforts in an effort to halt a COVID-19 outbreak. Chinese Vice Premier Sun Chunlan called the situation in Beijing manageable but that containment efforts can’t ease, Reuters reported, citing Xinhua, the state news agency.
“The oil market remains caught between fears of recession and the consequences of the zero-COVID policy in China on the one hand, and tight supply, especially of oil products, coupled with the prospect of U.S. gasoline demand picking up during the summer driving season on the other,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note.
Tight U.S. supplies of gasoline and diesel have sent prices for both to records, though gasoline futures were in retreat Tuesday. Demand for gasoline expected to increase as summer driving season kicks off with the Memorial Day weekend.
Investors continue to monitor efforts by the European Union to agree to a plan to phase out imports of Russian oil and other energy in response to demand by Hungary for increased EU support to help it transition to other sources.
Weakness in equity markets has been a drag on crude, with big selloffs killing appetite for other assets perceived as risky. U.S. stocks were under renewed pressure Tuesday after a Monday bounce.