Gasoline prices today (June 28): Regaining momentum after a plunge of more than 2%

Oil prices have regained momentum after sliding nearly $2. WTI crude oil prices rose above $68/barrel, Brent crude oil leveled off at $72.26/barrel,

World oil prices

Oil prices plunged more than 2% on Thursday amid signs that central banks may not raise interest rates, while industry data showed U.S. gasoline and crude inventories fell during the peak summer driving season.

Oil prices regain momentum after a more than 2% plunge. Illustration photo: Reuters

Brent crude futures fell $1.92, or 2.6%, to $72.26 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $1.67, or 2.4%, to $67.70 a barrel.

Both contracts have been trading within $10 since early May.

According to OANDA analyst Craig Erlam, price movements are largely dependent on “ever-changing interest rate expectations.”

On June 27, European Central Bank (ECB) President Christine Lagarde said persistently high inflation would force the bank to avoid announcing an end to interest rate hikes.

In fact, higher interest rates could hurt economic activity and oil demand.

According to Reuters , the ECB has raised interest rates at every meeting this year, bringing the deposit rate to 3.5% and promising to tighten further as soon as July as it tries to curb inflation that is still three times the 2% target.

The ECB's deposit rate could peak at 4%, analysts say, with another move likely in September or October after a 25 basis point hike in July.

Despite concerns about a slowing economy in Europe, interest rates are still rising and this is putting downward pressure on prices, said Phil Flynn, an analyst at Price Futures Group.

Meanwhile, in the US, consumer confidence in June rose to its highest level in nearly a year and a half amid a return to optimism in the labor market.

However, the upbeat data suggests the US Federal Reserve (Fed) may have to continue raising interest rates to slow demand in the economy as a whole. The US central bank has raised its policy interest rate by 500 basis points since March 2022 and signaled this month that there will be two more rate hikes this year.

US gasoline and oil inventories fell last week, supporting rising gasoline prices. Illustration photo: Reuters

On June 27, the American Petroleum Institute (API) released data on US oil and gasoline inventories last week. Specifically, crude oil reserves fell by about 2.4 million barrels in the week ending June 23; gasoline inventories fell by about 2.9 million barrels. Official government data will be released today.

Elsewhere, six-month Brent crude futures hit their lowest since December 2022, suggesting that concerns about a supply crunch are easing.

For the two-month range, the market is in shallow contango. This indicates that traders are counting on a slightly oversupplied market.