Oil prices rise 3% after rout in previous session

On Wednesday, the price of crude oil futures rose nearly 3%, as investors piled back in after the heavy rout in the previous session, shifting their focus to supply concerns even as worries about a recession increased.

After plunging 9.5% on Tuesday, the biggest daily drop since March, the price of crude futures rose $2.82, or 2.7%, to $105.59 a barrel by 1222 GMT.

U.S. West Texas Intermediate crude was up $2.46, or 2.4%, to $101.95 a barrel, after closing below $100 for the first time since late April.

Today is sort of a reset. John Kilduff, partner at Again Capital LLC, said there is no doubt that short covering and bargain hunters are coming in.

The sell-off was definitely overdone, he said.

OPEC Secretary General Mohammad Barkindo said on Tuesday that the industry was under siege due to years of underinvestment, and that shortages could be slowed if additional supplies from Iran and Venezuela were allowed.

Russia's former president Dmitry Medvedev also warned that a proposal from Japan to cap the price of Russian oil at about half its current level would lead to significantly less oil in the market and push prices above $300- $400 a barrel.

A union leader and the labour ministry said on Tuesday that the Norwegian government intervened in order to end a strike in the petroleum sector that had cut oil and gas output, ending a stalemate that could have worsened Europe's energy crunch.

By Saturday, the strike would have cut daily gas exports by 1,117, 000 barrels of oil equivalent boe or 56% of daily gas exports, while 341,000 barrels of oil would have been lost, the Norwegian Oil and Gas NOG employers' lobby said.

Markets have been weighed down by worries about a recession. The world's largest economy may have shrunk in the three months from April to June, according to some early estimates. That would be the second straight quarter of contraction, considered the definition of a technical recession.

More G 10 central banks raised interest rates in June than any month in the last two decades, according to Reuters calculations. The pace of policy-tightening is not expected to go up in the second half of 2022 with inflation at multi-decade highs.