Oil prices recovered ahead of trading this week with a two per cent plus uptick across both major benchmarks on Friday.
This arrested a marked slump which saw benchmarks end the month lower for the first time since November, with increasingly gloomy reports of global economic growth and possible recessions.
Nevertheless, Brent Crude rose 2.38 per cent on Friday to $111.60 per barrel, while WTI Crude climbed 2.52 per cent to $108.40 per barrel.
The rebound was powered by fresh reports of tightening markets, which have kept prices historically elevated above the $100 milestone since Russia’s invasion of Ukraine in February after eight years of trading in double digits.
The latest tight market tailwinds include OPEC opting against discussions on further raising production demands for September at its two-day gathering last week.
During its previous meeting in early June, OPEC and its allies (OPEC+) decided to raise output each month by 648,000 barrels per day in July and August, compared with a previous plan to add 432,000 barrels per day over three months.
OPEC+ has persistently missed production pledges this year amid capacity issues and fears of any potential supply glut leaving OPEC exposed to lower oil prices.
US President Joe Biden is expected make a three-stop trip to the Middle East in mid-July which includes a visit to Saudi Arabia, as the West struggles with soaring fuel prices which has driven inflation to 8.6 per cent.
The White House is desperate to drive down energy prices ahead of key mid-terms in November, with the Democrats holding only slim majorities in both the Senate and House of Representatives.
Meanwhile, a planned strike among Norwegian oil and gas workers on July 5 could cut the country’s overall petroleum output by around eight per cent, or around 320,000 barrels of oil equivalent per day, unless a last-minute agreement is found over wage demands.
Members of the Lederne labour union, who make up around 15 per cent of the country’s offshore industry work force, are demanding salary hikes to compensate for rising inflation.
They plan to strike at three offshore fields om Tuesday, and add three more fields the following day if a solution is not found.
The country is a highly important oil and gas trader, particularly for meeting Europe’s energy needs.