Oil prices jumped 3% despite fears of a global recession. Friday’s price rally was not driven by upward disruptions in production or supply, nor by significant increases in the demand outlook. WTI traded at $2.54 a barrel, while Brent traded at $2.60 a barrel.

Crude oil prices rose 3% on Friday despite fears of a global recession that have permeated the oil price narrative in recent weeks, weighing on prices.

Friday’s price rally was not driven by upward disruptions in production or supply, nor by significant increases in the demand outlook. At 11:45 am ET, WTI was trading up $2.54 a barrel (+3.04%) at $86.08. While up more than 3 percent on the day, the U.S. benchmark was trading down nearly $2 a barrel from last week. Benchmark Brent traded down $2.60 a barrel at the time (+2.92%) to $91.69 – down more than $2 from last week. One of the supporters of oil prices is the general market belief that OPEC+ will defend a certain price – probably close to $90 Brent. For OPEC+, which has struggled to meet its production targets even as prices rose to uncomfortable levels, output cuts would be a logical solution to falling prices as recession fears persist and concerns about crude demand in China, thanks to its restrictive zero-Covid policy. This zero-Covid policy could cause China’s fuel consumption to fall by 380,000 bpd this year compared to last year, according to a new Energy Aspects forecast published on Friday. If realized, it would be the first drop in China’s fuel consumption in two decades. On Thursday, US Secretary of State Jennifer Granholm suggested that the Biden administration was considering further releases of the country’s crude oil reserves (SPR) last October, although an Energy Department official later denied this. The United States’ SPR inventories are the lowest they’ve been in decades, and further depletion of the SPR — the only way the United States can tap into extra barrels in the short term — will continue to send oil into commercial inventories, sending a dangerous message US ignores market calls for more oil.
By Julianne Geiger for Oilprice.com More top reads from Oilprice.com: Download the free Oilprice app today Return to home page