Brent crude remained below the $60 per barrel barrier but made a slight rebound over the week to finish at $58.64 per barrel. WTI also achieved a slight weekly rise to $54.87 per barrel.
Global financial markets wobbled with traders and speculators looking to cash out amid fears of a looming global recession — the same driver for current jitters in the oil markets.
Equity market traders and oil future market speculators have been selling after the US Treasury bond yield curve inverted for the first time since 2007. The US short-term bond yields dipped below 10-year. This is a marker for every recession cycle for the past 50 years.
The EIA reported an increase in US crude oil stocks by 1.6 million barrels while market participants expected a drop in US crude oil inventory as US refining runs remained high and utilization increased to 94.3 percent ahead of October refinery maintenance season.
US Refining margins are still strong enough to encourage refiners to keep runs high. The refiners’ output for both gasoline and middle distillate remains strong amid low unemployment in the US that is expected to bolster gasoline demand.
US crude oil inventories typically decline at this time of the year before heading into the fall refinery maintenance season, which is expected to peak in October. So the surprise gain in US crude stockpiles shouldn’t add to the deepening concerns over the outlook for global oil demand — which remains strong.
In China, even though some one million barrels a day of refining capacity went offline during the maintenance season in June and July, China’s refinery throughput in July stood at 12.4 million bpd as the country added newly built or expanded refineries.
While traders continue to worry about a coming global recession and reduced global oil demand as a result, OPEC+ is continuing to stabilize the market.