Oil prices rose over 2% on Monday as US recession fears eased and some traders saw crude’s three-week slide on demand worries as overdone. Brent crude was up $1.57, or 2.1%, at $76.87 a barrel by 11:19 a.m. EDT (1519 GMT). US West Texas Intermediate (WTI) crude also gained $1.73, or 2.4%, to $73.07.

A healthy U.S. jobs report for April helped oil to climb by about 4% on Friday even though labour market strength could compel the Federal Reserve to keep interest rates higher for longer.

Brent had finished last week with a decline of about 5.3% while US crude plunged by 7.1% even after Friday’s rebound. Both benchmarks were down for three weeks in a row for the first time since November.

“Oil’s rebound (on Monday) follows energy stocks’ comeback on Wall Street last Friday after the US reported strong job data, which eased concerns about an imminent economic recession,” said CMC Markets analyst Tina Teng.

Banking concerns have plagued the market recently after the collapse of three major regional banks. Regional banks’ shares on Monday, however, stretched gains from a rebound on Friday.

“The market is less worried about a banking crisis that could lead to a recession and hurt demand,” said Phil Flynn, an analyst at Price Futures Group.

Ole Hansen, head of commodity strategy at Saxo Bank, said oil’s recent drop looked excessive.

“An oversold market condition combined with Brent managing to find support ahead of the March low forced recently established short sellers to seek cover, potentially highlighting that the recent sell-off was overdone,” he said.

Goldman Sachs analysts on Saturday said that concerns over near-term demand and elevated supplies were “overblown.”

A round of voluntary output cuts by some members of the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, begin this month and the group holds its next meeting on June 4.

Before then, US consumer price inflation figures for April will be in focus on Wednesday, potentially influencing the Fed’s stance on future interest rate decisions.

OPEC’s latest monthly oil market report is due on Thursday, providing an updated reading on the demand and supply outlook.

 European stocks ended little changed on Monday, reflecting a subdued opening on Wall Street, as investors eyed a new round of US inflation data this week that could determine the prospect for interest rates in the world’s largest economy.

Asian markets had rallied earlier, tracking the strong gains in New York last Friday after a forecast-busting US jobs report and a rebound in regional banking stocks, which had sparked fears of wider financial industry fragility.

The strong labour market fuelled hopes the Federal Reserve would succeed in its quest to curb inflation while avoiding an economic “hard landing” or even recession, whose effects would be felt worldwide.

“Investors continue to be relieved by the American employment numbers, which prove the labour market’s resistance despite tighter monetary policy,” said Pierre Veyret, an analyst at ActivTrades.

“Nonetheless, the volatility is probably not over, because the main worries, linked to further tightening by the ECB, and the standoff over the US debt ceiling and the bank sector crisis, remain,” he said.

Both the Fed and the European Central Bank raised benchmark rates by 25 basis points last week, and attention is now on US consumer and producer inflation figures that are due starting Wednesday.

The data “should all show that the disinflation trend is now firmly in place”, ING analysts said.

But Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, cautioned that “any upside surprise in inflation figures would bring the Fed hawks back to the market”, potentially weighing on stocks.

Investors also remain wary of any further upheaval in the US financial system following last week’s turmoil that saw the sale of the embattled First Republic Bank to JPMorgan Chase.

That followed the collapse in March of three other banks and the takeover of Credit Suisse by UBS, which sparked panic on trading floors.

There are also growing worries about a possible catastrophic US debt default, as right-wing Republicans square off against President Joe Biden over spending plans.

Treasury Secretary Janet Yellen is warning the country could run out of cash to pay its bills as soon as the start of June unless Congress raises the debt limit.