International oil prices rebounded, but faced with recession fears, investors weighed four major factors

On Thursday (August 18), international oil prices rebounded, but the oil market faced global recession fears, investors weighed factors such as falling US inventories, rising Saudi production and exports, the prospect of increased Russian production, and the resumption of negotiations on the Iran nuclear deal
.

High global inflation has sparked widespread recession fears that a recession will hurt energy demand
.
Energy prices in Europe have skyrocketed, adding to the pressure
on local household spending.
UK consumer price inflation jumped to 10.
1% y/y in July, the highest level
since February 1982.

The UK isn't the only country facing a price spike, but it is the first G7 country to experience inflation above 10%.

There are signs that the UK's fight against inflation will last longer
than other economies, including the rest of Europe.

According to the Bank of England, soaring energy prices in Europe are a major driver of inflation and could tip the UK into a prolonged, even slight, recession
later this year.
Chancellor of the Exchequer Nadhim Zahawi said fighting inflation was his top priority and the government was looking at a plan
to cut household energy bills.

On the supply side, Russia began to gradually increase oil production, leading Moscow authorities to raise production and export forecasts
through the end of 2025 as purchases by Asian buyers increased, according to documents from the Russian Ministry of Economy.
Russia has previously introduced output restrictions in response to Western sanctions
.

Russia's energy export revenue is expected to grow 38 percent this year to $337.
5 billion, in part due to increased
oil exports, the document said.
This suggests that the country's energy supply has not been affected
as initially expected by the market.
The document also expects energy export revenues to fall to $255.
8 billion next year, still up from $244.
2 billion
in 2021.

U.
S.
crude inventories fell by 7.
056 million barrels in the week ended Aug.
12, well ahead of expectations of 275,000 barrels, as exports reached a record high
of 5 million barrels per day, according to the latest data from the U.
S.
Energy Information Administration (EIA).
The data also showed that implied demand increased by 225,000 b/d last week as recent weakness in oil prices appeared to provide some support
to demand.

Saudi Arabia's June crude oil exports rose about 2 percent to 7.
196 million b/d from about 7.
050 million b/d in May, data released on Wednesday from the Joint Data Initiative (JODI); Production rose to 10.
646 million b/d from 10.
538 million b/d in May, the highest level
in more than two years.

The chief executive of Saudi Arabia's state-owned oil company, Aramco, said over the weekend that the company was prepared to raise crude oil production to the 12 million b/d limit if requested by the Saudi Arabian government
.

Markets are also waiting for progress on resuming negotiations on the Iran nuclear deal, which could eventually lead to a significant increase
in Iranian oil exports.
Iranian crude exports could climb for a third straight month in August as Russian oil becomes relatively more expensive for some Asian buyers
, data firms that track the flow.