London — Oil prices rose slightly on Friday, bouncing off their lowest levels since February, as concern over supply shortages was countered by expected declines in fuel demand.
Brent crude rose 39c, or 0.4%, to $94.51 a barrel by 09.00 GMT. US West Texas Intermediate crude was up 27c, or 0.3%, at $88.81.
Prices have come under pressure this week as the market fretted over the impact of inflation on economic growth and demand, but signs of tight supply kept a floor under prices.
The Opec+ producer group agreed this week to raise its oil output goal by 100,000 barrels per day (bpd) in September, but this was one of the smallest increases since such quotas were introduced in 1982, Opec data shows.
“Opec’s meagre supply hike highlights the limited capacity the market has to handle further shortages,” ANZ Research analysts said.
The global crude oil markets remained firmly in backwardation, where prompt prices are higher than those in future months, indicating relatively tight supplies.
Supply concerns are expected to ratchet up closer to winter, with sanctions banning seaborne imports of Russian crude and oil products set to take effect on December 5.
“With the EU halting seaborne Russian imports, there is a key question of whether Middle Eastern producers will reroute their barrels to Europe to backfill the void,” said RBC analyst Michael Tran.
“How this Russian oil sanctions policy shakes out will be one of the most consequential matters to watch for the remainder of the year.”
For now, signs of an economic slowdown capped price recovery. Recession worries have intensified since the Bank of England’s warning of a drawn-out downturn after it raised interest rates by the most since 1995.
“If commodities are not pricing in an imminent economic recession, they might be preparing for a ‘stagflation’ era when the unemployment rate starts picking up and inflation stays high,” said CMC Markets analyst Tina Teng.