On Friday, restricted supplies helped oil prices finish up by more than $3 a barrel, but they registered their second weekly decrease due to worries that the global economy would enter a recession if interest rates continue to rise.
By 12:10 p.m. EDT, Brent crude finished up $3.07, or 2.8 percent, at $113.12 per barrel (1610 GMT). American West Texas Intermediate (WTI) crude ended the day at $107.62, up to $3.35 or 3.2 percent.
According to John Kilduff, partner at Again Capital LLC in New York, the U.S. Federal Reserve “was being extremely hawkish which was undercutting the oil rise, but the mood is changing a little especially on positive economic data.”
Concerns about further interest rate increases increased on Thursday when Fed Chair Jerome Powell declared that the central bank’s aim of reducing inflation was “unconditional.”
In spite of a little improvement in the forecast for inflation, a survey released on Friday revealed that U.S. consumer sentiment reached a record low in June.
This year, when demand was rebounding from the COVID pandemic and supply was already tight due to Russia’s invasion of Ukraine, oil prices came dangerously near to the record high of $147 set in 2008.
Due to turmoil, production in OPEC member Libya has nearly completely stopped, which has helped crude. The chairman of the National Oil Corporation allegedly withheld output statistics from the Libyan oil minister on Thursday, casting doubt on the figures released the previous week.
However, “the assumption is that the oil market will experience high demand and tight supply over the summer months, hence limiting the fall,” said Stephen Brennock of oil broker PVM. Recession worries were the dominant attitude, he said.
