Oil prices jumped for a fourth session in five days of trading, recovering a portion of what they lost last week, as bulls bought the dips in a market that had cratered from key $100 pricing to below $90 a barrel.
Brent, the London-traded global benchmark for crude, settled up $2.20, or 2.3%, at $99.60, after a session peak at $100.08. By Thursday’s close, Brent was up more than 5% on the week, after losing 14% last week.
West Texas Intermediate (WTI), the benchmark for US crude, settled up $2.41, or 2.6%, at $94.34 per barrel, after coming just a dime shy of hitting $95 at the session high. As of Thursday, WTI was up almost 6.5% on the week after a 10% tumble last week.
The oil rally was in contrast to what was happening on the ground with oil.
The average pump price of gasoline in the United States, arguably the biggest indicator of real oil demand, was below the key $4 per gallon level on Monday for the first time in months after a record high $5 per gallon in mid-June, which prompted American drivers to exercise more discretion in their fuel usage.
Oil traders were also reacting to contrasting outlooks for demand.
The International Energy Agency (IEA) said soaring international prices for natural gas could prompt more energy consumers to switch to oil for year-end heating purposes.
“Natural gas and electricity prices have soared to new records, incentivizing gas-to-oil switching in some countries,” the Paris-based IEA said in its monthly oil report. It raised its outlook for 2022 oil demand by 380,000 barrels per day.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) changed downward its 2022 forecast for growth in world oil demand.
OPEC said it expects 2022 demand to rise by 3.1 million barrels per day, down 260,000 from its previous forecast. OPEC has typically used lower demand as an excuse to cut production and boost prices.
The US investment bank and financial services company Goldman Sachs projected gasoline prices to be back at above $5 a gallon and Brent at above $130 by the year-end.