Oil settles up but posts weekly decline on recession fears

  • Brent, US crude head for second Weekly decline
  • The Fed’s inflation fight is ‘unconditional,’ Powell says
  • US consumer sentiment at record low, inflation Outlook improves
  • OPEC + seen sticking to plan at the June 30 meeting

June 24 (Reuters) – Oil prices settled up by more than $ 3 a Barrel on Friday, supported by tight supply, but they notched their second Weekly decline on concerns that rising interest rates could push the world economy into recession.

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Brent crude settled up $ 3.07, or 2.8%, at $ 113.12 a barrel by 12:10 pm EDT (1610 GMT). The US West Texas Intermediate (WTI) crude settled up $ 3.35, or 3.2%, at $ 107.62.

The US Federal Reserve “was talking very hawkish which was undermining the oil rally, but sentiment is changing a little especially on strong economic data,” said John Kilduff, partner at Again Capital LLC in New York.

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On Thursday, Fed Chair Jerome Powell said the central bank’s focus on curbing inflation was “unconditional”, adding to fears about more interest rate hikes. read more

A survey on Friday showed US consumer sentiment hit a record low in June even as the Outlook for inflation improved slightly. read more

Russia’s Invasion of Ukraine exacerbated tight supplies this year just as demand has been recovering from the COVID Pandemic, and oil came close to an all-time high of $ 147 reached in 2008.

Crude has gained support from the almost total shutdown of output in OPEC member Libya due to Unrest. On Thursday, the Libyan oil minister said the chairman of the National Oil Corporation was withholding production data from him, raising doubts over figures issued last week.

Stephen Brennock of the oil broker VAT received a recession fears dominated sentiment, yet “the Consensus remains that the oil market will see high demand and tight supply over the summer months, thereby limiting the downside.”

The Organization of the Petroleum Exporting Countries and its allies, known as OPEC +, will meet on June 30 and are expected to stick to a plan to only slightly Accelerate hikes in oil production in July and August. read more

US energy firms this week added oil and natural gas rigs for a second week in a row in a record 23-month streak of increases, as high crude prices and prodding by the government prompted Drillers to return to the wellpad, energy services firm Baker Hughes Co said in its closely followed report on Friday.

The latest Weekly US oil Inventory figures, which will give a snapshot of supply tightness to the top consumer, have been delayed to next week due to technical issues. read more

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Additional reporting by Alex Lawler in London, Jeslyn Lerh in Singapore; Editing by Marguerita Choy, Jason Neely and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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