By Barani Krishnan – Oil prices were on track to mark a third week of gains on speculation of runaway summer demand for fuels, although some investors were keeping a wary eye on gasoline consumption, which hasn’t performed to expectations since the start of the peak U.S. driving season.

West Texas Intermediate crude, the benchmark for U.S. oil, was up 85 cents, or 1.2%, at $71.14 per barrel by 2:00 PM ET (18:00 GMT). Its session high was $71.23, a peak since October 2018. 

For the week, WTI showed a 2.2% gain, extending the 5% rise and 4% rally in the two weeks prior.

Brent crude, which acts as the global benchmark for oil, was up 39 cents, or 0.5%, to $72.91. Brent earlier rose to a session peak of $73.07, the highest for a day since May 2019. 

If it maintains its current trajectory, Brent could end this week up 1.4%, after last week’s gain of 3% and the previous week’s rally of 5%.

Oil prices have been on a tear lately amid projections for one of the biggest ever summer demand periods for fuel in the United States as the country reopens fully from Covid-19 lockdowns.

The International Energy Agency, which represents the interests of Western oil consumers, said in its monthly report that global producers would need to boost output to meet demand set to recover to pre-pandemic levels by the end of 2022.

“OPEC+ needs to open the taps to keep the world oil markets adequately supplied,” the Paris-based IEA said, referring to the 13-member Organization of the Petroleum Exporting Countries and its 10 non-member allies. 

Despite the optimism over global oil demand, U.S. gasoline take-up has been tepid since the May 31 Memorial Day that marked the start of the peak summer driving period in the world’s largest oil consuming country. That suggests to some that more time was probably needed for U.S. fuel demand to accelerate.

The problem was particularly highlighted in the Weekly Petroleum Status report released by the U.S. Energy Information Administration on Wednesday, which stated that gasoline inventories rose by 7.05 million barrels during the week ended June 4. Analysts tracked by had forecast a build of just 1.2 million barrels for the period.

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The Washington-based EIA also reported that stockpiles of distillates, which include diesel and heating oil, rose by 4.4 million barrels against expectations for a 1.8 million barrel rise. 

Offsetting some of the build in gasoline and distillates, crude stockpiles fell by 5.2 million barrels in the week to June 4, the EIA said, versus a forecast decline of 3.5 million barrels.

“We need to start showing some strong weekly draw numbers on gasoline soon,” John Kilduff, founding partner at New York energy hedge fund Again Capital, said this week. “Otherwise WTI is going to get weighed down, even if crude stocks keep falling.”

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