Oil prices managed to find their footing with Brent crude oil edging up 15 cents to $84.22 a barrel and U.S. West Texas Intermediate crude oil gaining 20 cents to $82.51 on Friday.
However, despite the day’s stability, both benchmarks were set to close the week with losses of around 12% and 9%, respectively, as concerns over demand and global economic challenges loomed large.
The week’s pivotal moment came when Russia partially lifted its ban on diesel exports but with a caveat: companies must allocate at least 50% of their diesel production for domestic consumption.
While almost three-quarters of Russia’s 35 million tonnes of diesel exports flowed through pipelines in 2022, the gasoline export ban remains unchanged.
These developments unfolded against a backdrop of apprehension about higher interest rates and their impact on global growth.
The U.S. Federal Reserve’s commitment to maintaining higher rates, coupled with concerns about mounting government spending and a burgeoning budget deficit in the U.S., sent shockwaves through the market.
Edward Moya, an analyst at OANDA, characterized the week as “brutal” due to a relentless bond market selloff, but added that the oil market’s short-term prospects still appeared tight, drawing buyers back into the market.
As investors brace for economic indicators, including the U.S. monthly jobs report, and as the European Central Bank keeps a watchful eye on inflation, the energy sector remains at the intersection of economic forces that could continue to shape oil prices in the weeks to come.
