Oil closes higher as recession fears ease

Oil drilling rigs

Oil prices closed higher today, June 21, after Federal Reserve Chairman’s statements pointed to expansion of economic activity in the United States, easing recession fears.

Fed Chair Jerome Powell said that although the US economy slowed significantly last year, recent indicators show that economic activity continues to expand at a modest pace. Inflation is still higher than the central bank's long-term target of 2%, which makes it appropriate to move to further rate hikes by the end of the year, he added.

The International Energy Agency said in a joint report with the International Finance Corporation that emerging economies' investments in renewable energy must reach $2.8 trillion annually by early 2030, to meet demand and align with the climate goals set out in the Paris Agreement.

A report by the Energy Information Administration (EIA) showed that the crude oil refining capacity in the US reversed a two-year decline and rose by more than 100,000 barrels to 18.1 million barrels per day, according to calculations on Jan. 1 of this year.

Meanwhile, the US raised the amount of biofuels that oil refineries must incorporate into the fuel mix to 20.94 billion gallons this year, 21.54 billion gallons in 2024 and 22.33 billion gallons in 2025.

The American Petroleum Institute is expected to issue its report on oil inventories in the US later today. The EIA data on US inventories is scheduled for June 22, with expectations of a decline in crude stocks by 433,000 barrels.

Brent crude futures for August delivery increased by 1.6%, or $1.22, to close at $77.12 a barrel.

WTI crude for August delivery rose 1.9%, or $1.34, to record $72.53 a barrel.