Jul 22, 2022 02:35AM ET
By: AnalysisWatch
Oil prices rose in Asian trade on Friday, recovering from earlier declines amid supply shortages and geopolitical tensions, although weak demand in the United States cast a shadow over the market this week.
By 02:30 AM ET, Brent crude futures were up $1.61, or 1.6%, at $105.47 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were up $1.43, or 1.5%, at $97.78 a barrel.
According to Innes, investors have their eyes firmly on the Federal Reserve's interest rate decision next week. Fed officials have indicated that the central bank will most likely raise rates by 75 basis points at its July 26-27 meeting.
While signs of slowing demand in the U.S. weighed on oil prices, sending benchmark contracts down about 3% in the previous session, tight global supplies continued to buoy the market.
WTI was pressured in the last two sessions after data showed that gasoline demand in the U.S. fell nearly 8% from a year earlier in the middle of the peak summer season, leading to record prices at the pumps.
In contrast, signs of strong demand in Asia supported the Brent reference price, putting it on track for its first weekly increase in six weeks.
Analysts at RBC said demand for gasoline and distillates in India rose to record levels in June, despite higher prices. Total refined product consumption was 18% higher than a year earlier, and Indian refineries were running at their highest capacity ever, despite higher prices.