NEW YORK- Oil prices rose over 2 percent as US recession fears eased and some traders saw crude’s three-week slide on demand worries as overdone.
Brent crude settled up $1.71, or 2.3 percent , at $77.01. US West Texas Intermediate (WTI) crude also gained $1.82, or 2.6 percent , to $73.16.
A healthy US jobs report for April helped oil to climb by about 4 percent on Friday even though labor market strength could compel the Federal Reserve to keep interest rates higher for longer.
Brent had finished last week with a decline of about 5.3 percent while US crude plunged by 7.1 percent even after Friday’s rebound. Both benchmarks were down for three weeks in a row for the first time since November.
“Oil’s rebound (on Monday) follows energy stocks’ comeback on Wall Street last Friday after the US reported strong job data, which eased concerns about an imminent economic recession,” said CMC Markets analyst Tina Teng.
Banking concerns have plagued the market recently after the collapse of three major US regional banks in recent months. Still, the KBW Regional Banking index . posted its best single-day performance in seven weeks on Friday, before falling on Monday. .
“The market is less worried about a banking crisis that could lead to a recession and hurt demand,” said Phil Flynn, an analyst at Price Futures Group.
Also supporting oil prices, Alberta declared a state of emergency over the weekend in response to wildfires that have displaced nearly 30,000 people and prompted energy producers to shut in at least 185,000 barrels of oil equivalent per day (boepd), about 2 percent of Canada’s output. – Reuters
