A strong demand for gasoline in China drove crude oil demand higher and subsequently increased the prices of the commodity in the market, according to a Bloomberg report.

According to Bloomberg, Brent crude price rose above $70 in the world market whilst the U.S. benchmark has also risen to $72.71 a barrel in the early hours of Thursday, June 17, 2021.

There is a spike in oil prices in recent days as global demand continues to recover from the COVID-19 pandemic while OPEC+ keeps a tight rein on supply and speculators.

The past week has seen a jump in prices of oil amid bullish outlook demand from international Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC).

However, according to data provided by Bloomberg, Gasoline demand in May 2021, was 5 percent higher than it was in the last pre-pandemic year. Diesel consumption, on the other hand, remained largely flat.

China is among one of the biggest swing factors in oil prices. The available data has added to the already strong evidence that China influences the world market prices of oil even though the influence of other factors cannot be underestimated. For instance, whilst seasonal refinery maintenance may send oil prices down, news about improving demand invariably pushes them higher.

Moreover, crude oil import data from the world’s top importer has been particularly bullish for prices. For months now, China has been aggressively buying every available oil in the market and if care is not taken there will be shortage of oil in the market in the short-term. As a result, prices rose, and they are still rising, prompting doubts that the buying spree will continue.

Meanwhile, an oil market expert, Clyde Russell, averred that the immediate outlook is not particularly bullish because of the refinery maintenance season.

“Some 1.2 million bpd in refining capacity went offline for regular maintenance in May and will remain offline until the end of this month June. This would mean lower crude oil imports during the period.”

Indeed, import data for May showed a 15-percent drop from a year earlier. This was expected and did not have a lasting effect on prices. Still rebounding, demand elsewhere may dampen China’s thirst for crude as it pushes Brent above $72 per barrel and West Texas Intermediate (WTI) above $71 per barrel.

It is worth noting that, rising crude prices are part of a broader commodity price surge caused by supply chain disruptions resulting from the pandemic and threatening China’s stellar recovery. China has tried to rein prices of the oil market but that also comes with a hefty social cost.

Crude oil is one of the most in-demand commodities. Brent Crude and West Texas Intermediate (WTI) are the two most traded grades of oil in the market. While Gasoline is a fuel made from crude oil and other petroleum liquids, its demand affects the price of crude oil. Crude oil prices reflect the market’s volatile and liquid nature, as well as oil being a benchmark for global economic activity.