Title: Oil prices rise as tightening supply offsets global economic concerns

Jun 20, 2022 03:05AM ET

By: AnalysisWatch

Oil prices rose in volatile trading Monday, reversing earlier losses as tightening supplies outweighed concerns about slowing global economic growth and fuel demand.

At 02:33 ET, Brent crude futures were 42 cents, or 0.4%, higher at $113.54 a barrel. Front-month prices fell 7.3% last week, posting their first weekly decline in five years.

The price of U.S. West Texas Intermediate crude oil was $109.85 per barrel, up 29 cents, or 0.3%. Front-month prices fell 9.2% last week, the first decline in eight weeks.

Oil from Russia, the world's second-largest exporter, remains out of reach for most countries due to Western sanctions over Moscow's invasion of Ukraine, which Russia calls a "special operation."

The impact has been partially mitigated by U.S.-led releases of strategic oil reserves and increased production from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, although this reduces the global buffer against further supply disruptions.

ANZ analysts said in a note. "If Washington maintains its current pace, the U.S. strategic reserve will fall to a 40-year low of 358 million barrels by October."

Libya's oil production remains volatile following blockades by groups in the east of the country.

Libyan Oil Minister Mohamed Oun told Reuters news agency on Monday that the country's total production was around 700,000 barrels per day (bpd). An oil ministry spokesman said last week that Libyan production had fallen to between 100,000 and 150,000 barrels per day.

Exports of petroleum products from China, once a major exporter, have continued to decline, leaving global supplies tight.

Chinese customs data showed Saturday that the country's gasoline exports fell 46% in May from a year earlier, and diesel exports slumped 93%, although domestic demand was flat as companies failed to fill their export quotas.