Oil rises on the market Caution in the face of supply problems | Investment News

MELBOURNE (Reuters) – Oil prices rose 1% in early trading on Tuesday, further recouping last week’s losses as attention returned to tight supplies of crude and petroleum products amid concerns over a recession that would hit demand on the trail.

Brent crude futures rose $1.32, or 1.2%, to hit $115.45 a barrel at 0040 GMT, adding a 0.9% gain on Monday. The benchmark contract fell 7.3% last week in its first weekly decline in five.

U.S. West Texas Intermediate (WTI) crude futures hit $111.51 a barrel, up $1.95, or 1.8%, from Friday’s close. There was no settlement on Monday, which was a holiday in the United States. WTI fell 9.2% last week.

Supply worries drive the market amid Western sanctions over the bite of Russian oil and questions linger over how Russian production could tumble due to sanctions on equipment needed for production, analysts said .

“The market remains cautious on Russian oil disruptions as European sanctions take effect,” analysts at ANZ Research said in a note.

The push and pull between supply concerns and global growth uncertainty in the face of inflation and rising interest rates is likely to play out in the market for some time, analysts said.

“It’s a tension we’re going to see play out for the rest of this year,” said Justin Smirk, senior economist at Westpac.

He said the extent of the risk of demand destruction is unclear, given that the global economy is still recovering from the COVID crisis.

“There are fears of a recession, but we’re not there. We still have a recovery,” Smirk said.

Weekly U.S. oil inventory data will be delayed a day this week due to the June 16 holiday on Monday, with industry data from the American Petroleum Institute for the week ending June 17 set. expected on Wednesday and data from the US Energy Information Administration on Thursday.

(Reporting by Sonali Paul; editing by Richard Pullin)

Copyright 2022 Thomson Reuters.

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