Prices had sold off with risk assets in the immediate wake of the U.S. jobs data

Prices had sold off with risk assets in the immediate wake of the U.S. jobs data for May as they were “perceived as ‘hot’ and hawkish for Fed policy” and “ultimately negative for growth and consumer demand,” said Tyler Richey, co-editor at Sevens Report Research. “But futures have since recovered as the details of the report were not nearly as strong as the headline would suggest.”

“In the near term, an uncertain and potentially fluid OPEC+ backdrop, simmering geopolitical tensions and perceived resilience could support oil prices and even see a retest of $80 [a] barrel” by WTI crude, he said. “But looking at the longer-term setup for oil, it is less than encouraging with all the telltale signs of a looming recession falling into place at a time when OPEC+ is likely maxed out with regard to their willingness to curb production any further than they already have.”