The oil prices rose sharply this Friday But they posted their third straight week of losses, after markets fell sharply on fears of a weakening US economy and slowing Chinese demand.
The crude Brent rose $2.80, or 3.9%, to $75.30 a barrel, and US West Texas Intermediate (WTI) rose $2.78, or 4.1%, to $71.34. dollars, after four days of decline that took the contract to lows last seen at the end of 2021.
Benchmark Brent closed the week down around 5.3%, while WTI lost 7.1%, even despite Friday’s rebound. Both contracts chained three consecutive weeks down for the first time since November.
* “Rather than underlying fundamentals, the selling frenzy over the past week has been driven by demand concerns linked to recession risks and stress in the US banking sector,” said Stephen Brennock of PVM. “The result is that there is a big disconnect between balance sheets and crude prices.”
* Commerzbank analysts also said concerns about oil demand are exaggerated and expect an upward price correction in the coming weeks.
* A better-than-expected US jobs report helped ease some fears of an imminent economic slowdown, spurred in part by renewed banking fears. Investors also generally expect the Federal Reserve to suspend rate hikes at its June policy meeting.
* In China, however, factory activity contracted unexpectedly in April due to falling orders and weak domestic demand.
However, expectations of possible supply cuts at the next OPEC+ producer group meeting in June have provided some support for prices, said Kelvin Wong, a market analyst at OANDA in Singapore.
Source: Ambito
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