After plunging 9.5 percent on 5th July, the largest daily drop since 2022’s March, brent crude oil price futures LCOc1 increased 2.7% or $2.82, to $105.59 per barrel by 122 GMT. US West Texas crude oil price CLc1 rose to 2.4 percent or $2.46, so to S101.95 for each barrel, after being less than $100 for the first time in months since end of April.
Crude oil futures on Wednesday rose to almost 3 percent as investors are piling back in post the heavy rout of the earlier session, re-shifting their focus to supply concerns once again even when worries about an approaching recession mounted.
John Kilduff, one of the partners at Again Capital LLC asserted on oil price hikes that “today is sort of a reset. No doubt there is short covering and bargain hunters are coming in.” He further added that the main story regarding international tightness still exists and the “sell-off was definitely overdone.”
Mohammad Barkindo, the Secretary General of OPEC opined on 5th July, 2022 that the industry was certainly “under siege” owing to under-investment for years. So, the growing shortages could be combated if extra supplies are allowed from Venezuela and Iran.
Dmitry Medvedev, the former president of Russia, also gave the warning that a suggesting from Japan to keep the cost of Russian oil at nearly half its present level would only lead to alarmingly less oil in the global market, pushing prices beyond $300 or even $400 per barrel.
On the other hand the government of Norway intervened on Tuesday to put an end to the strike ongoing in the petroleum sector that had significantly cut gas and oil output, the labour ministry and a union leader commented on oil price hikes, culminating a situation that could have deteriorated the energy crunch of Europe.
Stress about a recession is weighing heavy on markets. As per some early estimates, the largest economy of the world may have reduced in three months between April and June. Going by the definition of ‘recession’, that would be the contraction’s second quarter.
June 2022 witnessed more rise in interest rates offered by major banks than any month ever in the past two decades. Reuters calculations have proven the same point. With such high inflations, the policy-tightening pace cannot be hoped to let up even in the second half of the year.
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