Oil edges higher as report says Biden will depart Saudi Arabia with no announcement on deal to ramp up supply

Phil Rosen
Updated ·2 min read
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Joe Biden
President Joe Biden motions while boarding Air Force One at Los Angeles International Airport after attending the Summit of the Americas in Los Angeles, Calif., on June 11, 2022.AP Photo/Evan Vucci

  • Brent crude, the international benchmark, climbed 2% to move above $101 Friday.

  • Bloomberg reported President Biden is set to leave Saudi Arabia without an announcements on oil production.

  • Investors are weighing global recession concerns, with fears of a downturn weighing on energy markets.

Oil prices climbed Friday as Bloomberg reported that President Joe Biden won't have a public announcement on oil supply after his trip to Saudi Arabia.

Brent crude, the international benchmark, gained 2.07% to trade above $101, while West Texas climbed 1.70% to $97.54.

Biden had previously promised to turn Saudi Arabia — the world's biggest oil exporter — into a "pariah" over the killing of a Washington Post journalist in 2018, though this week's visit was meant to enlist the country's help to stem soaring energy prices, which have damaged his political prospects.

On Friday, Biden is set to meet with the de facto leader of Saudi Arabia, Crown Prince Mohammed Bin Salam, then meet with other Persian Gulf leaders on Saturday.

According to Bloomberg, it isn't clear there will be any new developments for Biden to announce following the trip regarding updates on energy supplies.

OPEC+ members, including Saudi Arabia, are still facing production constraints from the pandemic, and there are obstacles to ramping up supplies. Plus, for an OPEC+ nation to increase output beyond the current quotas would require unanimous agreement from member nations.

Meanwhile, investors are reacting signals that the world's economies are headed for a downturn.

The potential for a recession in the US has led to concerns over a drop in fuel demand, which has weighed on crude prices. The US crude benchmark has fallen roughly 8% this week. Globally, the picture isn't any better. The European Union is facing its own energy crisis amid constraints on Russia energy supplies, which could tip the bloc's economy into a severe recession.

Meanwhile, the International Monetary Fund this week said it would cut its 2022 global growth outlook this month for the second time since April. It cited inflation, lingering pandemic issues, and the war in Ukraine as weighing on growth.

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