Aug 3, 2023 - Economy

Oil prices are moving up as recession fears ease

Data: FactSet; Chart: Axios Visuals

Oil prices are moving up — they surged 17% in July, and analysts are now seriously talking about $100 oil again.

Why it matters: It's a sign the market is feeling more optimistic about the economy — with recession fears abating.

  • It also means more upward pressure at the pump, and on inflation more generally: A little summer agita for U.S. Federal Reserve Chair Jerome Powell.

Zoom in: The dynamics are simple. Oil prices are rising because demand forecasts are growing, thanks to the improving economic outlook — while supply is shrinking.

  • Saudi Arabia and Russia have both recently cut back on production.
  • Analysts at Société Générale and Standard Chartered forecast that the commodity will touch $100 next year, the Wall Street Journal reports.

Go deeper: The heat wave is driving up gas prices

Go deeper