Oil prices rose on Friday, recouping some of this week’s losses on strong U.S. job growth data but remained on course to close the week near their lowest levels since February, rattled by worries a recession could hit fuel demand.
Source: Reuters
Brent crude rose $1.46, or 1.6%, to $95.58 a barrel by 11:56 a.m. EDT (1556 GMT). U.S. West Texas Intermediate crude was up $1.24, or 1.4%, at $89.78.
U.S. job growth unexpectedly accelerated in July as nonfarm payrolls increased by 528,000 jobs, the largest gain since February, the U.S. Labor Department reported.
“This is strong economic data that’s supporting the oil market rise today,” said Bob Yawger, director of energy futures at Mizuho.
During the session, both benchmarks hit lows last seen before Russia’s Feb. 24 invasion of Ukraine. Brent remained down about 13% since last Friday’s close with WTI nearly 9% lower.
Oil traders this week have fretted about inflation, economic growth and demand, but signs of tight supply kept a floor under prices.
Recession worries have intensified since the Bank of England’s warning on Thursday of a drawn-out downturn after it raised interest rates by the most since 1995.
“Clearly, everyone is taking the threat of recession far more seriously as we’re still seeing a very tight market and producers with no capacity to change that,” said Craig Erlam, senior market analyst at Oanda in London.
The OPEC+ producer group agreed this week to raise its oil output goal by 100,000 barrels per day (bpd) in September, but this was one of the smallest increases since such quotas were introduced in 1982, OPEC data showed.
Supply concerns were expected to ratchet up closer to winter, with European Union sanctions banning seaborne imports of Russian crude and oil products set to take effect on Dec. 5.
“With the EU halting seaborne Russian imports, there is a key question of whether Middle Eastern producers will reroute their barrels to Europe to backfill the void,” said RBC analyst Michael Tran.
“How this Russian oil sanctions policy shakes out will be one of the most consequential matters to watch for the remainder of the year.”
Oil rig count data from energy services firm Baker Hughes is expected at 1 p.m. EDT.
The number of rigs drilling for gas has increased to 155 up from just 104 a year ago, but there has been little further increase over the last six weeks.
