Title: Oil prices bounce back from Tuesday tumble as supply concerns return
Jul 06, 2022 03:05AM ET
Oil prices rose nearly 3% on Wednesday before paring gains as investors poured back into the market after a sharp slide in the previous session, with supply concerns coming back to the fore even as worries about a global recession persist.
Brent crude futures rose as much as $3.08, or 2.9%, to $105.85 a barrel in early trade after falling 9.5% on Tuesday, the most since March. At 02:50 AM ET, the price was last up $1.63, or 1.6%, at $104.40 a barrel.
U.S. West Texas Intermediate (WTI) crude climbed to a high of $102.14 a barrel, up $2.64, or 2.7%, after closing below $100 for the first time since late April. Facing a stronger U.S. dollar, it briefly dipped into negative territory before rebounding, last rising $1.20, or 1.2%, to $100.70 a barrel.
The dollar hit a 20-year high against the euro and multi-month highs against other major currencies as higher gas prices and political uncertainty rekindled recession fears, prompting investors to seek the safe-haven currency.
A stronger dollar typically makes oil more expensive in other currencies, which could dampen demand.
Meanwhile, former Russian President Dmitry Medvedev warned that a purported proposal by Japan to cap the price of Russian oil at about half its current level would result in significantly less oil coming to market, pushing prices above $300 to $400 per barrel.
On the other hand, the Norwegian government intervened Tuesday to end a strike in the oil sector that had curtailed oil and gas production, according to a union leader and the Labor Ministry.