Oil rose this week as the US government promises to protect bank depositors and a lack of surprises from the Federal Reserve calmed investors.
Crude settled above $69 a barrel on Friday, recovering about a quarter of the nearly $10 it lost the previous week. Analysts said the commodity remains volatile and while banking concerns remain at the forefront of markets, crude oil fundamentals may have limited effect on its price movements.
“Crude found support this week after several weeks of uninterrupted pressure,” said Rebecca Babin, senior energy trader at CIBC Private Wealth. “Fear surrounding a recession and choppy trading has many investors on hold.”
Investors also found bullish signs this week, with U.S. exports of crude and refined products rising to a record 12 million barrels a day, suggesting a more upbeat demand outlook. Meanwhile, Russia expanded its crude output by 500,000 barrels per day through June.
However, crude pared its weekly gains on Friday as fresh signs of stress in the banking sector sent investors away from riskier assets ahead of the weekend.
Prices:
- WTI for May delivery fell 70 cents to settle at $69.26 a barrel in New York.
- Brent for May settlement fell 92 cents to settle at $74.99 a barrel.
Crude remains on course for its steepest first-quarter drop since 2020, when the pandemic wiped out demand. A possible recession in the United States, strong Russian oil flows in the face of Western sanctions, and strikes at French refineries have all proven to be downside forces.
