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Oil Prices Climb Rises the Global Economic Concerns

by Carl Steward
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oilOil Prices Climb Rises the Global Economic Concerns

Oil prices gained in choppy trade on Monday, recovering previous losses, as tightened supply induced fears about slowing global economic growth and fuel demand.

By 0633 GMT, Brent crude futures had risen 42 cents, or 0.4 percent, to $113.54 a barrel. Last week, front-month prices fell 7.3 percent, the first weekly drop in five weeks. West Texas Intermediate crude price in the United States was $109.85 a barrel, up 29 cents or 0.3 percent. Last week, front-month prices fell 9.2 percent, the first dip in eight weeks. Most nations cannot obtain oil from Russia, the world’s second-largest exporter, due to Western sanctions imposed in response to Moscow’s invasion of Ukraine, which Russia refers to as a “special operation.” The impact has been partially mitigated by the United States’ release of strategic petroleum reserves and a ramp-up in production from the Organization of Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+. However, the world’s buffer against further supply disruptions is thinning.

ANZ analysts believe that if Washington maintains its present pace, the US strategic reserve will reach a 40-year low of 358 million barrels by October.

Is Another Rise in Oil Prices on The Way?

Following blockades by factions in the country’s east, Libya’s oil output has remained erratic. On Monday, Libyan Oil Minister Mohamed Oun said that the country’s overall output is around 700,000 barrels per day (BPD). Libya’s output has dropped to 100,000 to 150,000 barrels per day, according to a spokesperson for the oil ministry last week.

Despite sluggish domestic demand, China’s gasoline exports decreased 46% year on year in May; meanwhile, diesel exports tumbled 93%, according to Chinese customs statistics released on Saturday. In May, the country’s crude oil imports from Russia increased by 55 percent yearly to a record high; surpassing Saudi Arabia as the country’s leading supplier as refiners took advantage of inexpensive supplies under Russian sanctions. Despite this, oil and gas output in the United States is increasing.

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