Oil Prices Rise 4%, And Brent Crude Is Above $113
Oil prices rose about 4% on Friday, June 24, supported by a supply shortage, although crude is heading for a second weekly decline amid concerns that higher interest rates could push the global economy into recession.
US Federal Reserve Chairman Jerome Powell said Thursday that the central bank’s focus on curbing inflation was “unconditional”, adding to concerns about interest rate hikes that have weighed on financial markets.
Oil Prices Today
The price of the futures contracts for the benchmark Brent crude – for delivery next August – increased by 3.66%, to reach 113.64 dollars per barrel.
The price of West Texas Intermediate crude futures – for delivery next August – also rose by 4.11%, recording $108.23 a barrel, according to data seen by the specialized energy platform.
And oil prices ended their trading with a decline of about 2%, yesterday, Thursday, continuing the bleeding of losses for the second consecutive session, recording the lowest level in 6 weeks.
Oil prices briefly rose by about $1 a barrel in early Asian trading before paring gains, and for now, fears of slowing demand stemming from higher interest rates and slowing US economic activity are turning a loss.
“Looking at the futures curves, both Brent and WTI are still lagging significantly, indicating that spot oil supplies remain as limited as ever,” said Jeffrey Haley, senior market analyst .
“It appears that growing fears of economic recession have prompted the elimination of speculative long positions in both decades,” Haley added.
Crude oil futures were in the sell mode after US manufacturing and services PMIs came in well below expectations, along with lower German manufacturing data, said Stephen Innes, managing partner at SBI Asset Management.
“Under these circumstances, high crude prices will become very sensitive to any input into the oil supply,” Innes added.
Sources said that OPEC and allied producing countries, including Russia, will likely stick to the plan to accelerate production increase in August, in the hope of easing crude prices and inflation, as US President Joe Biden plans to visit Saudi Arabia.
The OPEC + alliance agreed – at its last meeting on June 2 – to increase production by 648,000 barrels per day in July, or 7% of global demand, and by the same amount in August, up from the initial plan to add 432,000 barrels per day. For three months until September.
However, the alliance has struggled to meet its monthly increase targets due to lack of investment in oil fields by some OPEC members and, more recently, Russian production losses.