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U.S. Federal Reserve Chair Jerome Powell said on Thursday the
central bank's focus on curbing inflation was "unconditional",
adding to fears about more interest rate hikes that have weighed
on financial markets.
Brent crude was up $1.42, or 1.3%, at $111.47 a barrel by 0952
GMT, while U.S. West Texas Intermediate (WTI) crude gained
$1.29, or 1.2%, to $105.56. Both benchmarks were heading for a
second weekly decline.
"Increasing recession fears appear to be prompting a culling of
heavy speculative long positioning in both contracts, even as in
the real world, energy tightness is as real as ever," said
Jeffrey Halley, analyst at brokerage OANDA.
Oil came close this year to an all-time high of $147 reached in
2008 as Russia's invasion of Ukraine exacerbated tight supplies
just as demand has been recovering from the COVID pandemic.
Crude has gained support from the almost total shutdown of
output in OPEC member Libya due to unrest. The Libyan oil
minister said on Thursday the National Oil Corporation chairman
was withholding production data from him, raising doubts over
figures he issued last week.
Stephen Brennock of oil broker PVM said recession fears
dominated sentiment, adding: "That being said, the consensus
remains that the oil market will see high demand and tight
supply over the summer months, thereby limiting the downside."
The Organization of the Petroleum Exporting Countries and its
allies, known as OPEC+, meet on June 30 and are expected to
stick to an earlier plan to accelerate slightly hikes in oil
production in July and August, rather than provide more oil.
The latest U.S. oil inventory figures, which will give a
snapshot of supply tightness in the top consumer, have been
delayed to next week.
(Additional reporting by Jeslyn Lerh in Singapore; editing by
Edmund Blair and Jason Neely)
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