DTN Oil
Projected Gain in US Holiday Travel Boosts Oil Futures
CRANBURY, N.J. (DTN) -- Nearest delivered oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange advanced Monday on bullish expectations for holiday travel in the United States over the Memorial Day weekend in an otherwise uninspired range-bound trade.
AAA projects 38.4 million people will travel by car over May 23-27, which would be a record high for the U.S. holiday frequently identified as the kickoff to the summer driving season. If realized, it would mark a 4% increase year-on-year while 1.9% above the pre-COVID 2019 Memorial Day weekend.
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The travel group expects 43.8 million Americans will travel 50 miles or more from home over the holiday. The current record was reached in 2005 with 44 million travelers. AAA Travel senior vice president Paula Twidale said increasing travel for the Memorial Day weekend "signals a very busy summer travel season ahead."
Oil futures have come under pressure in May as growth in oil demand has been lackluster. Gasoline supplied to the U.S. market during the four weeks ended May 3 was 4% below the comparable year-ago period, and cumulatively so far this year down 1.6%, according to data from the Energy Information Administration. Distillate fuel supplied to the U.S. market in 2024 is down 4.9% against the same timeline in 2023, with the decline accelerating to 6.6% against a year ago during the four weeks ended May 3.
The upbeat projection runs contrary to falling consumer sentiment, with the University of Michigan on May 10 reporting the index fell to a six-month low in early May as consumers worried about inflation, interest rates and unemployment. The Bureau of Labor Statistics on Wednesday will release the Consumer Price Index, with the inflation gauge expected to have ticked down in April.
June RBOB futures settled $0.0108 higher at $2.5105 gallon, holding above May's $2.4826 10-week low on a spot continuous basis with a $2.4913 intrasession low. June ULSD futures inched up $0.0024 with a $ 2.4368-gallon settlement, trading between key support at the $2.3783 trendline for the downtrend from the April 2022 high and retracement resistance at $2.4973 gallon.
June West Texas Intermediate futures gained $0.86 with a $79.12-a-barrel (bbl) settlement, trading between $77.62 and $79.54, 61.8% and 50% Fibonacci retracement points for the February-April uptrend, respectively. July Brent ended the session just above the $83.34 100-day moving average at $83.36 bbl, up $0.57.
Brian L. Milne can be reached at brian.milne@dtn.com