Oil Turns Higher Amid Fading Recession Risk

 Oil Turns Higher Amid Fading Recession Risk

Oil Turns Higher Amid Fading Recession Risk

During the Monday trading session, the oil market turned higher as the chances of a recession in the USA are now very slim. This fundamental change has shifted the market focus towards the tightening supplies of oil & thus is pushing the prices higher.

And just a few days ago (on Friday), the NFP report from the USA also supported the oil prices. In fact, oil gained 4% from the recent jobs report despite the fact that Fed will likely raise interest rates.

After the recent events, Brent crude was trading at $76.39 after gaining $1.09. Similarly, the WTI oil gained $1.03 and was trading near $72.37.

Less Chance Of A Recession

According to analysts at CMC Markets, the rebound in the oil market is similar to what we are seeing in the energy stocks. As a result of this development, the chances of an economic recession are now even lower!

Just a week ago, Brent crude oil was down by -5.3%, while the US crude was down by 7.1%. Both of these benchmark indexes for oil were in a negative trend for three consecutive weeks!

After the decline, many experts said that the market reaction was excessive and not natural. But it appears that the oil market is now finally ready to turn higher once again.

If we look at the oil fundamentals, there are a lot of factors that support the higher prices. The first and most important one is the production cuts by major oil-producing countries such as Saudi Arabia.

Furthermore, lower chances of a recession in the USA will also boost the investor's sentiment and will likely further push the oil prices higher.

Looking ahead, the economic situation of countries such as China, the USA, Germany, & Japan will also shed on the oil demand.

And we all know that higher demand but a low supply of oil will automatically force the oil market to turn higher!

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