Title: Oil rises as market weighs tight supply, recession fears

Jul 08, 2022 02:45AM ET

By: AnalysisWatch

Oil prices rose slightly in volatile Asian trade on Friday, reversing earlier losses as the market weighed concerns about tight global supplies against recession fears.

Brent crude futures were up 48 cents, or 0.5%, at $105.13 a barrel by 0630 GMT, after rising nearly 4% on Thursday. US West Texas Intermediate crude was up 3 cents at $102.76 a barrel after trading 4.2% higher the previous day.

However, both contracts continue to face their second consecutive weekly loss. Trading this week was marked by a sharp sell-off on Tuesday, when WTI slid 8% and Brent 9%.

The $10.73 drop in Brent was the third largest for the contract since it began trading in 1988.

The Western ban on Russian oil and gas production has pushed up global energy prices, while other major producers have yet to significantly increase their supply.

Central banks around the world are raising interest rates to curb inflation, stoking fears that rising borrowing costs could choke off economic activity and reduce oil demand.

Data from the U.S. Energy Information Administration (EIA) showed on Thursday that product shipments, the best indicator of consumer demand in the United States, rose to 20.5 million barrels a day last week. However, total demand for gasoline and distillates over the past four weeks was slightly more than 5% lower than the same period last year. [EIA/S] [API/S]

According to the EIA data, US crude oil inventories rose by 8.2 million barrels in the week ending 1 July, reflecting an increase in stockpiles and a production cut by refineries.