Brent stays calm while the oil market focuses on supply disruption and recession fears
Oil rose on Monday as supply concerns and lower OPEC production, unrest in Libya, and sanctions against Russia outweighed fears of a global recession that dampened demand. OPEC's June production failed to meet its target survey.
Brent oil prices changed little on Tuesday, reversing earlier gains of $1 as investors grew supply concerns highlighted by a potential production cut in Norway and a possible global recession would dampen fuel demand.
Brent crude futures for the September settlement rose 0.2%, or 22 cents, to $113.73 a barrel as of 0432 GMT.
West Texas Intermediate (WTI) crude rose $1.95, or 1.8%, to $110.38 a barrel as of Friday's close. No action was taken for WTI on Monday due to the Independence Day public holiday in the US.
Strike production in Norway will undoubtedly reduce production. The union said on Tuesday that Norwegian offshore workers began a strike.
Norwegian producer Equinor said the strike is expected to reduce oil and gas production by 89,000 barrels per day of oil equivalent (boepd), with gas production expected to account for 27,500 boepd.
Oil production will decline by 130,000 barrels per day from Wednesday, the country's oil and gas association forecast on Sunday. According to a calculation, this is equal to about 6.5% of Norway's production.
Data showing the improving activity in the service sectors of the economies of Japan and China, which are among the world's largest oil importers, provided some support to prices on Tuesday.
But overall, as the US Federal Reserve is battling hyperinflation with rapid interest rate hikes, investors are more concerned about demand amid a wide-ranging tightening in global financial conditions.
Rate hikes are also coming to the fore in Australia and South Korea as authorities try to curb inflation. South Korea's June inflation hit its highest level in almost 24 years, adding to concerns about economic growth and slowing oil demand.
Oil is still struggling to come out of the current recession discomfort as the market turns from inflation to economic despair.
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