Oil prices have been pushed and pulled in the past day, after the prospect of no further interest rate rises in the US were slammed by recessionary fears from the Federal reserve.
Crude sat at US$82.78 a barrel on Thursday afternoon, having fallen 0.9% from Wednesdays’ peak of US$83.53.
Emerging hopes that the Fed would pause interest rate hikes on the back of lower-than-expected inflation of 5% in March had lead to the peak.
However, these were soon overcome as minutes were released later in the day showing central bankers were fearful of a mild US recession later this year.
“Should signs of a slowdown in growth emerge this would likely take a toll on oil prices,” TickMill Group analyst James Harte commented.
Though prices did fall marginally, Harte attributed OPEC+ cuts and recovering Chinese demand for keeping oil above the US$80 mark.
OPEC+, which accounts for 40% of global oil production, chose to cut output by over a million barrels a day in early April, prompting fears prices would skyrocket.
Citi analysts reassured that oil was unlikely to top the US$100 mark this year as falling global GDP takes its toll.
Harte added recessionary fears would not “cause too much drag just yet” though, with oil prices “likely to remain skewed to the upside” on the back of the OPEC+ cuts.