Oil prices rose during the volatile trading session on Friday as supply uncertainty overpowered fears that demand would slow as U.S. economic activity cools.
Brent crude futures were up 31 cents, or 0.3%, to $110.36 a barrel as of 0630 GMT, while West Texas Intermediate (WTI) crude futures were up 59 cents, or 0.6%, to $104.86 a barrel.
Looking at their respective futures curves, both Brent and WTI are still heavily lagging, suggesting that the oil supply remains tight as ever.
Rising fears of recession seem to spur the removal of heavy speculative long positions on both contracts; therefore, the energy crunch is a real concern as ever.
Oil prices briefly rose about $1 a barrel in the early hours of Asian trading before cutting gains, and finally remained flat during the Asian intraday hours on Friday.
For now, fears of slower demand from interest rate hikes and slowing US economic activity have limited price increases.
Crude futures entered selling mode after US manufacturing and services PMIs came in well below expectations and Germany’s manufacturing data fell.
Russian crude hit the oil complex, and under these conditions, high crude oil prices made it hypersensitive to perceived or otherwise increased supply inputs.
According to the sources, OPEC and allied producing countries including Russia will stick to the accelerated production increase plan in August in hopes of easing crude oil prices and inflation.
The group which is known as OPEC+ agreed at its last meeting on June 2 to boost output by 648,000 barrels a day in July, or 7% of global demand, and by the same amount in August. The initial plan was to add 432,000 barrels per day a month over three months until September.
However, the group struggled to meet its monthly increase targets due to under-investment in oil fields by some OPEC members and, recently, losses in Russia’s supply sourced by the sanctions.
