ASX 200 energy shares could bounce back from recent falls this morning after oil prices rebounded strongly on Friday.
According to Bloomberg, the WTI crude oil price stormed 4.05% to US$71.34 a barrel and the Brent crude oil price rose 3.85% to US$75.30 a barrel.
However, it is worth noting that this could not stop oil from recording its third successive weekly decline. In fact, the Brent benchmark finished the week with a decline of 5.3%, while WTI crude oil lost 7.1% of its value despite Friday's rebound.
Nevertheless, it should be good news for ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT), Santos Ltd (ASX: STO), and Woodside Energy Group Ltd (ASX: WDS).
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Why did oil prices rebound?
Oil prices rebounded on Friday after a strong economic data out of the United States appeared to ease recession fears.
This didn't come as a surprise to oil market analyst Stephen Brennock from PVM after recent selling. He told CNBC:
Rather than underlying fundamentals, the selling frenzy over the past week has been driven by worries about demand linked to recession risks and the strain in the U.S. banking sector.
The senior vice president of trading at BOK Financial, Dennis Kissler, adds:
Crude is trying to reverse the recent washout in prices triggered by higher interest rates and recession fears mostly in the banking sector.
What's next?
The good news is that analysts at Commerzbank believe that oil prices could continue to recover, which would be a big positive for ASX 200 energy shares. A note reveals that its analysts believe that oil demand concerns were overblown and are expecting a price correction upward in the coming weeks.
All in all, today looks set to be a good day to have an ASX 200 energy share in your portfolio. Which is not something that has been possible to say for a few weeks.
