Oil prices rebounded slightly as data pointed to strong U.S. fuel demand, providing some relief after a 5% drop the day before due to fears that demand would suffer from increased COVID-19 restrictions in China and central bank interest rate hikes.

Currently, Brent crude is trading around $95 per barrel, while U.S. West Texas Intermediate is just below $89 per barrel.

Analysts told CNBC that they expect oil prices to remain steady through the second half of 2022, but they also noted that the potential impact of an economic recession has not been priced in yet. During a recession, oil prices tend to fall, providing some relief to consumers.

Brent crude futures rose $1.43, or 1.5%, to $94.45 a barrel by 0054 GMT after gaining 0.7% on Friday. U.S. West Texas Intermediate crude was at $88.12 a barrel, up $1.25, or 1.4%, following a 0.3% advance in the previous session. U.S. markets were closed for a public holiday on Monday.

Oil prices have fallen for three consecutive months after reaching multi-year highs in March, due to concerns that interest rate hikes and COVID-19 restrictions in parts of China, the world’s top crude importer, may slow global economic growth and reduce oil demand.

Both OPEC and the United States saw production hit its highest levels since the early days of the coronavirus pandemic.

According to a Reuters survey, OPEC’s output hit 29.6 million barrels per day (bpd) in the most recent month, while U.S. output rose to 11.82 million bpd in June. Both are at their highest levels since April 2020.

“The fear that there’s a slowdown here and then also the potential here for some additional supply increases coming down the pike is having some pressure on the market,” said Mike Sabo, market strategist at RJO Futures in Chicago.

The price of crude oil surged this year, with Brent coming close to a record high of $147 in March as Russia’s invasion of Ukraine exacerbated supply concerns. Since then, rising fears over high interest rates, inflation, and recession risks have weighed on the market.

Oil’s gain was limited by a strong U.S. dollar, which hit a 20-year high on Monday after the Federal Reserve chairman signaled that interest rates would be kept higher for longer to curb inflation.

A preliminary Reuters poll showed that U.S. crude oil stockpiles likely fell 600,000 barrels with distillates and gasoline inventories also seen down on Monday.

Russia, the world’s second-largest oil producer and a key member of OPEC+, does not support a production cut at this time and will keep its output steady.

Commodity traders will also be monitoring the status of negotiations to reopen the 2015 nuclear agreement between the West and Iran, which have dragged on despite the fact that a deal might enable Tehran to boost exports and increase supplies around the world.

On Friday, the White House rejected a deal with the closure of investigations by the U.N. nuclear watchdog, a day after Iran reopened the issue, according to a Western diplomat.

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