Oil futures climbed sharply on Wednesday, with U.S. prices at their highest in over two and a half years. Most of oil’s rise is “driven by expectations that gasoline inventories will take a hit” in supply data due out Thursday, and “anticipation that Americans, who stayed home last year, will be taking to the road again,” said James Williams, energy economist at WTRG Economics. The Energy Information Administration will release its weekly supply report on Thursday, a day later than usual because of Monday’s Memorial Day holiday. Oil prices, however, appeared to gain more ground during the session following reports of a fire at a state-owned refinery in Iran. That followed news that the largest warship in Iran’s navy caught fire and sank on Wednesday. The events are “raising the overall risk premium in the Middle East,” said Phil Flynn, senior market analyst at The Price Futures Group. “The biggest downside risk is the return of Iranian supply and that looks more unlikely.” West Texas Intermediate oil for July delivery climbed $1.11, or 1.6%, to settle at $68.83 a barrel on the New York Mercantile Exchange. Front-month contract prices ended at their highest since October 2018, FactSet data show.
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