Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil prices end week on multi-month lows on recession fears

Published 08/04/2022, 09:39 PM
Updated 08/05/2022, 04:00 PM
© Reuters. FILE PHOTO: Oil pump jacks are seen at the Vaca Muerta shale oil and gas deposit in the Patagonian province of Neuquen, Argentina, January 21, 2019.  REUTERS/Agustin Marcarian/File Photo

© Reuters. FILE PHOTO: Oil pump jacks are seen at the Vaca Muerta shale oil and gas deposit in the Patagonian province of Neuquen, Argentina, January 21, 2019. REUTERS/Agustin Marcarian/File Photo

By Laura Sanicola

(Reuters) -Oil prices settled higher on Friday, recouping some of this week's losses on strong U.S. job growth data, but closed the week at their lowest levels since February, rattled by worries a recession could hit fuel demand.

Brent crude settled up 80 cents to $94.92 a barrel, 11% off last Friday's settlement. U.S. West Texas Intermediate crude settled up 47 cents to $89.01, off 8% in the week.

U.S. job growth unexpectedly accelerated in July as nonfarm payrolls increased by 528,000 jobs, the largest gain since February, the U.S. Labor Department reported.

"This is strong economic data that's supporting the oil market rise today," said Bob Yawger, director of energy futures at Mizuho.

Oil traders this week have fretted about inflation, economic growth and demand, but signs of tight supply kept a floor under prices.

The number of oil rigs, an early indicator of future output, fell seven to 598 in the week to Aug. 5, the first weekly decline in 10 weeks, energy services firm Baker Hughes Co BKR.O said in its closely followed report on Friday.

Recession worries have intensified since the Bank of England's warning on Thursday of a drawn-out downturn after it raised interest rates by the most since 1995.

"Clearly, everyone is taking the threat of recession far more seriously as we're still seeing a very tight market and producers with no capacity to change that," said Craig Erlam, senior market analyst at Oanda in London.

Supplies were still relatively tight, with prompt prices still higher than those in future months, a market structure known as backwardation.

The OPEC+ producer group agreed this week to raise its oil output goal by 100,000 barrels per day (bpd) in September, but this was one of the smallest increases since such quotas were introduced in 1982, OPEC data showed.

Supply concerns were expected to ratchet up closer to winter, with European Union sanctions banning seaborne imports of Russian crude and oil products set to take effect on Dec. 5.

© Reuters. FILE PHOTO: Oil pump jacks are seen at the Vaca Muerta shale oil and gas deposit in the Patagonian province of Neuquen, Argentina, January 21, 2019.  REUTERS/Agustin Marcarian/File Photo

"With the EU halting seaborne Russian imports, there is a key question of whether Middle Eastern producers will reroute their barrels to Europe to backfill the void," said RBC analyst Michael Tran.

"How this Russian oil sanctions policy shakes out will be one of the most consequential matters to watch for the remainder of the year."

Latest comments

Major oil buyage soon. Black gold is on a strong discount.
150$/bbl on October
Post midterms. Dems wont allow it sooner.
Says who
range bound at six months low range
0.4% 🙄
The western world succeeded to make a certain sanctioned country truckloads of money, whilst shooting themselves in both feet by creating energy + oil crises via greed driven markets speculation. 🤣
wrong the OPEC greed drived energy prices higher creating inflation ending up in a global recession, which will in turn drive the energy prices lower :)
You are so correct, we have a bunch of dumbasses in the White House
Biden and the rest of the inept western governments finally succeeded in bringing down oil prices…with a recession. Well done!
C'mon man, what did you expect since Obama's pulling his strings & printing his notecards?
@Jo: THIS IS 100% TRUE!!! I walked into the copy shop yesterday and, to my surprise, there was Barak Obama at one of the copiers. I asked him what he was doing and he said he was printing Joe Bidens note cards! ALL TRUE!!!
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.