(Reuters) – SingaporeOn Monday, oil prices went back down after going up earlier in the day. This happened because worries about slowing global economic growth and fuel demand outweighed worries about tightening supplies.
At 02:42 GMT, Brent crude futures fell 8 cents, or 0.1%, to $113.04 a barrel after rising as much as 1% earlier. Last week, prices for the first month went down by 7.3%, which was the first weekly drop in five weeks.
The price of a barrel of U.S. West Texas Intermediate crude fell by 7 cents, to $109.49, after rising by more than $1 earlier. Last week, prices for the first month went down by 9.2%, which was the first drop in eight weeks.
“It’s clear that macro factors are driving oil prices right now, not fundamentals, which are still positive,” said Warren Patterson, head of commodities research at ING.
Most countries still can’t get oil from Russia, which is the second-largest exporter in the world, because of sanctions put in place by the West because of the war in Ukraine.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, have increased production, which has helped lessen the impact. However, this reduces the world’s buffer against more supply disruptions.
ANZ analysts said in a note that if Washington keeps going at its current rate, the U.S. strategic reserve will hit a 40-year low of 358 million barrels in October.
Still, oil and gas production in the U.S. is going up.
The number of oil and gas rigs, which is an early sign of future production, went up by seven to 740 in the week ending June 17. This was the highest number since March 2020, according to a report from energy services company Baker Hughes Co.
After groups in the east of the country blocked oil production, oil production in Libya stayed unstable.
On Monday, Libyan Oil Minister Mohamed Oun told Reuters that the country makes about 700,000 barrels of oil per day (bpd). A spokesman for the oil ministry said last week that Libya’s output had dropped to 100,000 to 150,000 bpd.
China used to be a big exporter of oil products, but those exports have been going down, keeping supplies tight around the world.
Chinese customs data released on Saturday showed that the country’s exports of gasoline and diesel fell by 45.5% and 92.7%, respectively, in May compared to the same month last year. This was despite the fact that domestic demand had slowed down.
