Brent oil futures fell 0.2% to $104.40 a barrel after gaining nearly 4% on Thursday. US West Texas Intermediate crude fell 0.4% to $102.32 a barrel, up 4.2% a day earlier. Both contracts are falling for the second week in a row.
Trading this week was marked by a sharp selloff on Tuesday, with WTI shedding 8% and Brent shedding 9%. Brent’s $10.73 drop was the third-largest for that contract since trading began in 1988.
“Given further rate hikes and the possibility of a technical recession in the US, the ambitions of the market leaders may be quite limited,” said Steven Innes, managing director of SPI Asset Management.
“The only reason why oil hasn’t fallen is because of the independent and official sanctions on Russian oil,” Innes added.
Western oil and gas production bans in Russia are propping up global energy prices, while other major producers have yet to significantly increase supplies.
“The sell-off in commodities has received a reprieve as traders brush off recession fears and refocus on undersupply issues,” said Tina Teng, an analyst at CMC Markets.
However, economic uncertainty remains as benchmark bond yields point to an imminent recession that could continue to weigh on commodity prices, she added.
Central banks around the world are raising interest rates to tame inflation, raising fears that rising borrowing costs could stifle economic activity and reduce demand for oil.
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