Arab News, Aug 9, 2022 | Muharram 11, 1444
Oil edges up on strong economic data but trade choppy
HOUSTON: Oil prices rose 1.5 percent on Monday, hovering near their lowest
levels in months in volatile trading as positive economic data from China and
the US fed hopes for demand despite nagging fears of a recession.
Brent crude futures were up $1.44, or 1.5 percent, at $96.35 a barrel by 12:35
p.m. ET (1635 GMT). US West Texas Intermediate crude was at $96.33 a barrel, up
$1.38, or 1.5 percent.
Last week, fears that a recession could dent energy demand pushed front-month
Brent prices down 13.7 percent to their lowest since February. It was Brent’s
biggest weekly drop since April 2020, and WTI lost 9.7 percent.
Both contracts recouped some losses on Friday after jobs growth in the US, the
world’s top oil consumer, unexpectedly accelerated in July.
“Once again the macro influences have seeped back into this market especially as
it relates to Friday’s employment number the economics of that should be giving
us much better gasoline demand than we’re seeing,” said John Kilduff, partner at
Again Capital LLC in New York.
On Sunday, China also surprised markets with faster-than-expected growth in
exports.
China, the world’s top crude importer, brought in 8.79 million barrels per day
of crude in July, up from a four-year low in June, but still 9.5 percent less
than a year earlier, customs data showed.
In Europe, Russian crude and oil products exports continued to flow ahead of an
impending embargo from the EU that will take effect on Dec. 5.
Last week, the Bank of England warned of a protracted recession in Britain.
In terms of US production, energy firms last week cut the number of oil rigs by
the most since September in the first drop in 10 weeks.
Analysts at Goldman Sachs said they believe the case for higher oil prices
remains strong, with the market remaining in a larger deficit than they expected
in recent months.