Still, oil is up almost 60% this year as rebounding economic demand coincided with a tightening market following Russia’s invasion of Ukraine. The war has fanned inflation, driving up the cost of everything from food to fuels and some analysts are calling it the most bullish market they’ve ever seen.
Even faced with US economic slowdown, fundamentals for a tight crude market remain, said Pavel Molchanov, an analyst at Raymond James & Associates Inc. “When markets are worried about macroeconomic conditions equities take a lot of the hit” but oil prices have still shown to be “incredibly resilient,” said Molchanov.
Goldman Sachs Group Inc. reiterated on Friday that energy prices need to climb further for Americans to start cutting consumption. US retail gasoline prices have repeatedly broken records and recently hit $5 a gallon.
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The US has repeatedly asked OPEC to pump more crude to help tame rising gasoline prices and the hottest inflation in decades. President Joe Biden said on Saturday that he hasn’t yet made a decision about visiting Saudi Arabia, but that if he went it would be to take part in meetings that go beyond energy topics. A visit would reflect a shift in diplomatic priorities.
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