Oil prices are rising on Monday thanks to some easing of concerns over a possible recession.
A positive factor for the market was Friday’s data on the U.S. labor market, which showed that it remains strong despite a significant tightening of monetary policy by the Federal Reserve (Fed).
“Oil prices have been falling lately because of fears of a global recession, but strong labor market data and positive comments from central bank governors offer hope that a recession can be avoided this year,” said Jamil Ahmad, chief analyst at CompareBroker.io, cited by Market Watch.
Federal Reserve Chairman Jerome Powell said last week that the U.S. economy is likely to continue growing at a moderate pace this year and avoid a recession.
In addition, traders note that China is increasing its oil purchases and demand is likely to remain strong in the next few months due to increased tourist activity in the country.
At the same time, global oil inventories are shrinking and the problem will be exacerbated by OPEC+ production cuts.
July Brent crude futures on London’s ICE Futures exchange stood at $75.7 a barrel by 8:10 a.m. Monday, up $0.4 (0.53%) from the previous session’s closing price. Those contracts rose $2.8 (3.9%) to $75.3 a barrel on Friday.
The price of WTI crude futures for June grew by $0.43 (0.6%) to $71.77 per barrel at electronic auctions of New York Mercantile Exchange (NYMEX) by that time. The contract value grew by $2.78 (4.1%) to $71.34 per barrel at the end of previous session.
Brent was down 6.3% and WTI was down 7.1% at the end of last week.
“The market decline last week was much more significant than one would have expected, judging by the supply-demand balance in the market,” said Citigroup Inc. analyst Ed Morse. Ed Morse. – We can expect oil inventories to decline, given the approach of the summer season, during which demand will rise.”
