FX.co ★ Oil Extends Gains On Tight Supply

Oil prices were moving higher on Thursday for the second day running on signs of tight supply, heading into the peak U.S. driving season, which kicks off on Memorial Day.

Benchmark Brent crude futures rose 0.4 percent to $111.60 a barrel, while U.S. crude futures were up 0.7 percent at $111.05.

Energy Information Administration (EIA) data released on Wednesday showed that crude stockpiles dropped by 1.019 million barrels in the U.S. last week.

Gasoline inventories too dropped in the week, falling by 0.482 million barrels, while distillate stockpiles increased by 1.657 million barrels.

Investors are pricing in the prospect of rising demand from the summer driving season that starts this weekend.

Analysts say that the pent-up demand for travel is so high that Americans will travel regardless of the price at the pump. By comparison, prices at the pump have risen roughly 50 percent over the past year.

The American Automobile Association says that nearly 40 million people will likely travel 50 miles or more by car over the holiday period, representing an 8 percent year-on-year increase in travel over the upcoming weekend.