Home Energy services Oil prices end the week at multi-month lows on recession fears

Oil prices end the week at multi-month lows on recession fears

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Oil pump cylinders are seen at the Vaca Muerta shale oil and gas field in the Patagonian province of Neuquen, Argentina January 21, 2019. REUTERS/Agustin Marcarian/File Photo

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Aug 5 (Reuters) – Oil prices rose on Friday, recouping some of this week’s losses on strong U.S. job growth, but ended the week at their lowest levels since February, rocked by fears that a recession could affect fuel demand.

Brent crude settled 80 cents at $94.92 a barrel, 11% below last Friday’s settlement. U.S. West Texas Intermediate crude gained 47 cents to $89.01, down 8% on the week.

U.S. job growth unexpectedly accelerated in July, with nonfarm payrolls rising by 528,000 jobs, the largest gain since February, the U.S. Labor Department reported. Read more

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“It’s strong economic data supporting the bullish oil market today,” said Bob Yawger, director of energy futures at Mizuho.

This week, oil traders worried about inflation, economic growth and demand, but signs of tight supply kept prices bottoming.

The number of oil rigs, an early indicator of future production, fell by seven to 598 in the week to August 5, the first weekly drop in 10 weeks, energy services company Baker Hughes said on Friday. Co BKR.O in its report followed closely. .

Recession concerns have intensified since the Bank of England warned on Thursday of a prolonged slowdown after raising interest rates to the highest since 1995. read more

“Obviously everyone is taking the threat of recession much more seriously as we still see a very tight market and producers unable to change that,” said Craig Erlam, senior market analyst at Oanda in London.

Supplies were still relatively tight, with rapid prices still higher than those in the coming months, a market structure known as carryover.

The OPEC+ producer group agreed this week to raise its oil production target by 100,000 barrels per day (bpd) in September, but it is one of the smallest increases since those quotas were introduced. in 1982, according to OPEC data. Read more

Supply problems are expected to increase as winter approaches, with European Union sanctions banning maritime imports of Russian crude and petroleum products due to come into effect on December 5.

“With the EU halting Russian imports by sea, the key question is whether Middle Eastern producers will re-route their barrels to Europe to fill the void,” RBC analyst Michael Tran said. .

“How this Russian policy of oil sanctions plays out will be one of the most important issues to watch for the rest of the year.”

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Reporting by Noah Browning; edited by David Evans, Kirsten Donovan and David Gregorio

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