After a punishing week, the price of Bloomberg oil moved higher as traders weighed up the outlook for global demand amid mounting recessionary concerns.
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West Texas Intermediate rose above $79 a barrel after collapsing more than 7% last week to end at the lowest close since January. The US benchmark fell for the fourth consecutive week, the longest losing run this year.
Crude is on track for its first quarterly slump in more than two years as central banks including the Federal Reserve raise interest rates aggressively, hurting the outlook for energy demand and sapping investors appetite for risk, as it hurts the outlook for energy demand. Commodity prices in the currency have become more expensive for overseas buyers because of the Fed s tightening of the US dollar.
The Organization of Petroleum Exporting Countries and its allies may consider intervening to stem the slide, either verbally or by announcing a reduction in output. OPEC said members would monitor the market, and that they would announce a token supply cut earlier this month.
James Whistler, the managing director of Vanir Global Markets Pte, said that oil markets came under pressure as the Fed signaled it was willing to enter a recession in order to beat inflation. This may cause OPEC to take action as the current price level is likely to be less than the internal forecasts for member nations. Crude traders were keeping tabs on the path of Tropical Storm Ian, which is expected to strengthen into a hurricane this week as it approaches the Florida mainland. At present, forecasters are struggling to pinpoint where it will landfall, possibly anywhere from the Panhandle south to Tampa Bay.
The time spreads have narrowed, suggesting an easing of near-term tightness. The spread of the oil between its two closest contracts was at $1.13 a barrel, down from almost $2 a month ago.
The market appears to be pricing-in the typical impact of a deep recession, Australia New Zealand Banking Group Ltd. said in a note. The sell-off could see OPEC intervene again. None In Dozens of Lawsuits Parents Blame Meta, TikTok for Hooking Kids