Oil prices were stable on Monday, struggling to reverse last week’s losses, as the market balanced supply tightness with concerns about slowing global economic growth.
* As of 1022 GMT, Brent crude futures were down 38 cents, or 0.3%, at $112.74 a barrel. Immediate month contract prices fell 7.3% last week, their first weekly decline in five years.
* US West Texas Intermediate crude futures fell 18 cents, or 0.2%, to $109.38 a barrel. Immediate month contract prices fell 9.2% last week, the first decline in eight weeks.
* “Friday’s sharp price decline can be seen as a delayed reaction to recession concerns that have already been weighing on other commodity prices for some time,” said Commerzbank analyst Carsten Fritsch.
* Analysts and investors believe a recession is more likely after the US Federal Reserve approved the biggest interest rate hike in more than a quarter-century on Wednesday to curb rising inflation.
* Last week saw similar tightening talk from the Bank of England and the Swiss National Bank.
* Brent crude futures touched their lowest level in a month on Monday, but some analysts expect the decline to be short-lived.
* “Supplies will remain tight and continue to support high oil prices. The norm for Brent ICE remains around $120 a barrel,” said Stephen Brennock, an analyst at PVM.
* Western sanctions have curtailed Russia’s access to oil following its invasion of Ukraine, which Russia calls a “special operation.”
* Analysts expect the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to make limited output increases during the summer.
* The tight supply has been mitigated by the release of strategic oil reserves, led by the United States, where output is also rising, according to rig count data from energy services company Baker Hughes Co.