Oil Prices Reverse Losses, Gain On Tight Supply Concerns

Oil prices reversed losses and edged up on Monday as concerns of tight supply amid lower OPEC output, unrest in Libya and sanctions on Russia outweighed fears of a global recession.

Brent crude futures for September rose 55 cents, or 0.5 per cent, to $112.18 a barrel at 0650 GMT, after falling over $1 in early trade.

“The group appears to be battling to maintain current output levels, with production falling over June.”

Output from the 10 members of Organization of the Petroleum Exporting Countries (OPEC) in June fell 100,000 barrels per day (bpd) to 28.52 million bpd, off their pledged increase of about 275,000 bpd, a Reuters survey showed.

Libya’s exports have dropped to between 365,000 bpd and 409,000 bpd, down about 865,000 bpd compared to normal levels, the National Oil Corp said last week.

In a further hit to supply, a planned strike by Norwegian oil and gas workers this week could cut the country’s oil and condensate output by 130,000 bpd.

Fears of a global recession however are seen capping oil’s price gains, said CMC Markets analyst Tina Teng.