Oil’s red-hot rally takes a breather after seven weekly gains

Oil fell in early Asian trading following a run of seven consecutive weekly gains that’s pushed it to the highest level since 2014.

Futures in New York lost 0.6 per cent after surging above $93 a barrel on Friday. Oil’s market structure is still flashing signs of tighter supplies, however, and inventories at key storage hubs are falling. Saudi Aramco raised its prices for customers in Asia, the US and Europe for March in another bullish sign.

Oil has rallied on improving demand and supply outages, putting $100 a barrel within reach and raising concerns about inflation. There’s also a geopolitical risk premium in the price as Russia amasses troops near its border with Ukraine, although President Vladimir Putin has said he has no plans to invade.

The tight oil market is being reflected at the pump. In the US, the average price of gasoline surged to the highest in more than seven years, according to data from the AAA. That poses a fresh challenge to President Joe Biden as he tries to combat surging costs.