Early on Monday, oil prices fell as investors refocused on tight supply, however, the mood remained shaky following a 6% drop the previous day on fears about slowing global economic growth and fuel demand.
Brent oil futures were up 20 cents, or 0.2 percent, to $113.32 a barrel at 0105 GMT, after jumping as high as 1% earlier. Last week, front-month prices fell 7.3 percent, the first weekly drop in five weeks.
The price of West Texas Intermediate crude in the United States was $109.55 a barrel, down 1 cent after jumping more than $1 in early morning trading. Front-month prices dropped 9.2% last week, the first decline in eight weeks.
Due to Western sanctions, most countries are unable to get US oil. The damage has been partially offset by the release of strategic petroleum reserves, led by the United States, and a ramp-up of output from OPEC+, while the world’s buffer against additional supply interruption is shrinking. Despite this, oil and gas output in the United States is increasing.
The oil and gas rig count, a leading indicator of future output, increased by seven to 740 in the week ending June 17, the highest level since March 2020, according to Baker Hughes Co, an energy services business. Following blockades by factions in Libya’s east, oil output has remained erratic.
On Monday, Libyan oil minister Mohamed Oun told Reuters that the country’s overall output is around 700,000 barrels per day (BPD). Libya’s oil output was 100,000-150,000 barrels per day last week, according to a spokesman for the oil ministry.
Exports of oil products from China, which was formerly a significant exporter, have continued to fall, putting pressure on world supply. Despite stalled domestic demand, China’s gasoline exports declined 45.5 percent in May and diesel exports tumbled 92.7 percent as businesses ran out of export quotas.