Oil gained in choppy trading on Friday, but it was still on track for a weekly fall as fears of a recession-driven demand slump offset tight global supply.
Central banks are hiking interest rates to combat inflation, creating concerns that rising borrowing costs would hamper economy, while widespread COVID-19 testing in Shanghai this week fueled worries of possible lockdowns, which might reduce oil consumption. more info
By 1045 GMT, Brent oil had risen 35 cents, or 0.3 percent, to $105.00 per barrel, while West Texas Intermediate crude had risen 19 cents, or 0.2 percent, to $102.92.
Following the first monthly decrease since November, both benchmarks were poised to decline weekly. Prices had fallen on Tuesday, when Brent fell $10.73, the contract’s third-largest decrease since it began trading in 1988.
“With more rate hikes to come and the U.S. likely in a technical recession, top-side market ambitions could be quite limited,” Stephen Innes, managing director at SPI Asset Management, told Reuters.
On Friday, the latest U.S. employment report is likely to indicate that nonfarm payrolls climbed by 268,000 in June.
However, oil prices have risen dramatically in the first half of the year. After Russia started its invasion of Ukraine in February, Brent crude approached a record high of $147, adding to supply problems that some experts believe to grow.
“Although economic concerns have roiled oil prices this week, the market remains upbeat. This is because supply constraints are more likely to worsen rather than alleviate from here “PVM oil dealer Stephen Brennock said.
Western prohibitions on Russian oil shipments have kept prices stable and prompted a re-routing of supplies, even as the Organization of the Petroleum Exporting Countries (OPEC) and its partners struggle to meet agreed output increases.