Oil prices increased on Friday with Brent fluctuating widely over supply uncertainty although fears of a global recession and weaker-than-expected US economic data dampened the upward trajectory.
International benchmark Brent crude was trading at $110.24 per barrel at 0657 GMT for a 0.17% increase after closing the previous session at $110.05 a barrel.
American benchmark West Texas Intermediate (WTI) was at $104.70 per barrel at the same time for a 0.41% gain after the previous session closed at $104.27 a barrel.
After losing more than $5 a barrel since Monday, both benchmarks are on the rebound as investors gauge the likelihood of a global recession.
“We’re still in the territory of volatility. The recent decline is due to the fear of a global recession becoming more and more pronounced. That’s the biggest factor weighing on prices today, but at around $110, they are still pretty high compared to a few years ago,” Carole Nakhle, CEO of energy and geopolitical advice at research and training company Crystol Energy, said in her daily energy markets review for Gulf Intelligence Consultancy firm.
Nakhle said global macroeconomic developments are outweighing any potential improvement in Chinese demand and “even if we put the country’s zero-Covid policy aside, economic forecasts on China were not looking very strong.”
Further price upticks were suppressed after the release of preliminary manufacturing and service-sector sentiment data for June.
According to the latest report by the research firm IHS Markit, the flash US manufacturing Purchasing Managers (PMI) Index for June dropped to 52.4, marking a 23-month low, lower than the market expectation of 56. A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
In the service sector, the PMI fell to a five-month low of 51.6 in June.
According to experts, the report reflects the lowest increase in US private-sector output since January's omicron-induced recession.
By Sibel Morrow