• Political turmoil in Russia and concerns of global recession partially fuel WTI’s rebound.
• Weak business climate in Germany and China’s decelerating growth threaten oil demand.
• Saudi Arabia’s crude output adjustments might spur WTI’s recovery toward $70 per barrel.

Western Texas Intermediate (WTI), the US crude oil benchmark, snaps two days of losses and climbs more than 0.50% amidst global economic concerns of an impending recession and political turmoil in Russia. Therefore, WTI is trading at $69.49 per barrel late in the North American session after hitting a daily low of $68.71.

US crude oil climbs 0.50% late in the Noth American session as it shrugs off global economic jitters

During the weekend, a conflict erupted between Moscow and the Russian mercenary private group Wagner which withdrew from the south of Russia, marched towards Moscow but halted their advance, but stalled due to an agreement between its leader and Russian President Vladimir Putin.

Regarding the worldwide economic outlook, last Friday’s release of Eurozone (EU) and North American business activity indicators, known as PMIs, pointed to slower economic growth. Therefore, WTI slid 0.60% on Friday, closing below the $70.00 per barrel figure, on concerns that demand would shrink.

Even though WTI recovered some ground, the rally stalled on the back foot of a weaker business climate in Germany, as the Ifo survey showed signs the country’s Gross Domestic Product (GDP) would shrink in Q2.

Moreover, recent rate cuts by the People’s Bank of China (PBoC) showed China’s struggling to keep its pace of growth, which has been downward revised by some Wall Street banks. That, alongside decelerating business activity in China, threatens to hurt oil demand.

Oil got a lifeline as future US supply numbers fell for the eighth week in a row, for the first time since July 2020, with oil rigs falling 6 to 546 the latest week, its lowest since April 2022, while gas rigs held steady at 130.

Given the fundamental backdrop, WTI fell 3.6% during the last week, but Saudi Arabia’s crude output adjustments could trigger WTI’s recovery at least towards the $70.00 mark