Oil rose 2%, but fell weekly respect on recession concerns
Oil prices rose nearly 2% in volatile trade on Friday, but slid into the weekly slide as investors worried about a potential recession-driven drop in demand despite global fuel supply being limited.
Central banks around the world are raising interest rates to rein in inflation, and fears are mounting that borrowing costs could stifle growth.
Mass testing for COVID-19 in Shanghai this week has raised concerns about potential quarantines that could also hit oil demand.
Brent crude futures were up $2.37, or 2.3%, to settle at $107.02 a barrel. West Texas Intermediate (WTI) crude was up $2.06, or 2%, to $104.79 a barrel. Both indicators traded in negative territory and then recovered from session lows.
After the first month-on-month decline since November, Brent posted a week-on-week decline of around 4.1% and WTI reported a 3.4% loss. Prices tumbled on Tuesday, when Brent's $10.73 drop was the contract's third-biggest daily fall since it started trading in 1988.
US nonfarm payroll data showed the economy added more jobs than expected in June; This is a sign of persistent labor market strength that has prompted the Federal Reserve to raise rates by another 75 basis points this month.
U.S. energy firms added two oil rigs this week, bringing the total to 597, the highest since March 2020, according to energy services firm Baker Hughes.
Oil prices rose in the first half of 2022. Brent approached the record high of $147 after Russia launched its invasion of Ukraine in February, raising supply concerns.
Economic concerns may have swamped oil prices this week, but the market is still showing bullish signals. The reason for this is that there are intense concerns that the supply shortage will continue.
Western bans on Russia's oil exports have bolstered prices, and the Organization of the Petroleum Exporting Countries (OPEC) and allied producers are struggling to deliver on their promised production increases.
Russian President Vladimir Putin has warned the West that continued sanctions against Moscow risk triggering "catastrophic" energy price increases for consumers around the world.
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