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Oil settles up but posts weekly decline on recession fears

Commodities Jun 24, 2022 04:01PM ET
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© Reuters. An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS
 
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By Laura Sanicola

(Reuters) -Oil prices settled up by more than $3 a barrel on Friday, supported by tight supply, but they notched their second weekly decline on concern that rising interest rates could push the world economy into recession.

Brent crude settled up $3.07, or 2.8%, at $113.12 a barrel by 12:10 p.m. EDT (1610 GMT). U.S. West Texas Intermediate (WTI) crude settled up $3.35, or 3.2%, at $107.62.

The U.S. Federal Reserve "was talking very hawkish which was undermining the oil rally, but sentiment is changing a little especially on strong economic data," said John Kilduff, partner at Again Capital LLC in New York.

On Thursday, Fed Chair Jerome Powell said the central bank's focus on curbing inflation was "unconditional", adding to fears about more interest rate hikes.

A survey on Friday showed U.S. consumer sentiment hit a record low in June even as the outlook for inflation improved slightly.

Russia's invasion of Ukraine exacerbated tight supplies this year just as demand has been recovering from the COVID pandemic, and oil came close to an all-time high of $147 reached in 2008.

Crude has gained support from the almost total shutdown of output in OPEC member Libya due to unrest. On Thursday, the Libyan oil minister said the National Oil Corporation chairman was withholding production data from him, raising doubts over figures issued last week.

Stephen Brennock of oil broker PVM said recession fears dominated sentiment, yet "the consensus remains that the oil market will see high demand and tight supply over the summer months, thereby limiting the downside."

The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, meet on June 30 and are expected to stick to a plan to only slightly accelerate hikes in oil production in July and August.

U.S. energy firms this week added oil and natural gas rigs for a second week in a row in a record 23-month streak of increases, as high crude prices and prodding by the government prompted drillers to return to the wellpad, energy services firm Baker Hughes Co said in its closely followed report on Friday.

The latest weekly U.S. oil inventory figures, which will give a snapshot of supply tightness in the top consumer, have been delayed to next week due to technical issues.

Oil settles up but posts weekly decline on recession fears
 

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Comments (3)
Sajib Yellow
Sajib Yellow Jun 24, 2022 1:15AM ET
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new rumours need to come
Francis Lim Wei
Francis Lim Wei Jun 24, 2022 12:54AM ET
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can't wait for recession to come faster to normalise things hopefully everything drops by next month after rate hike. I already sold all my positions protecting my profits
Joel Schwartz
Joel Schwartz Jun 23, 2022 11:01PM ET
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Yeah who would thought fossilized dinosaurs was a sustainable energy source
Mangalavati Citra
Mangalavati Citra Jun 23, 2022 11:01PM ET
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It’s the blood of Mother Earth which vampire like humans are sucking. No wonder nature is hitting back tremendously, but headstrong world economy leaders don’t care. Technological advancements and knowledge could easily find a more nature friendly substitute.
 
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