Oil prices soared as the market shook off fears of a recession

Oil prices surged
on Friday as the market generally ignored the impact of concerns about a technical recession on crude oil demand, according to Oil Price Network on July 29.

At 11:40 p.
m.
ET, WTI crude was trading close to $100 at $99.
94 a barrel, up $3.
52 (+3.
65%)
on the day.
Brent crude was trading above $110 a barrel at $110.
20, up $3.
06 (+2.
86%)
on the day.

It seems impossible for the market to ignore the current supply crunch
.
Another bullish factor for crude oil on Friday was the release of U.
S.
crude oil production data for May released by the U.
S.
Energy Information Administration, which showed that U.
S.
crude oil production actually fell rather than rose in May, contrary to
the EIA's latest estimate in its Short-Term Energy Outlook.

News that OPEC+ may not have a big production increase target at the end of next week's meeting has also boosted oil prices
to a large extent.
On Thursday, five OPEC+ sources hinted that OPEC+ could keep its September production target unchanged
at August levels.
Two OPEC+ sources said the group could discuss a small increase in production
.
However, the market realizes that due to the chronic production shortfall, even an increase in the production target is unlikely to result in an actual increase in OPEC+ production compared to the organization's current target
.

WTI prices not only rose on the day, but all over the course of the week
.
However, prices have declined
over the past month.
This time last month, WTI was trading near $
110 a barrel.
So far this year, oil prices are up more than
$20 a barrel.

Amrita Sen, head of research at Energy Aspects, told Bloomberg on Friday that global oil demand does not appear to be declining
despite high crude oil prices and a recession.

There are signs that crude oil demand has not fully recovered from the pandemic, and inventories are tight, even as millions of barrels of crude oil leave the Strategic Petroleum Reserve
globally.
When these crude stops flowing out of the Strategic Petroleum Reserve in October, the market may become more nervous
.