Oil Prices Hold Steady as Concerns About Tight Supply and Weakening Demand Persist
Crude prices held steady early Monday as traders weighted the prospect of recession in the second half against worries that supply will remain limited.
Brent crude, the international standard, was little changed at $111.77 a barrel. West Texas Intermediate, the U.S. benchmark, was at $108.54. Trading may be slower on Monday as the U.S. marks the Fourth of July holiday.
Oil prices fell in June for the first month since November. Russia’s invasion of Ukraine in February caused prices to spike, but since then the prospect of the world’s biggest economies falling into recession has kept a lid on gains.
Vitol Group, the world’s biggest independent oil trader, said expensive fuel is destroying demand. “There’s very clear evidence out there of economic stress being caused by the high prices,” said Mike Muller, head of Asia at the company, in a podcast by Gulf Intelligence.
U.S. President Joe Biden has called on oil companies to reduce prices at the pump. Exxon Mobil on Friday indicated that second-quarter profits may reach records. In a regulatory filing, the biggest U.S. oil company projected an increase of about $7.4 billion in operating profits from the first quarter. Higher margins from refining products will ass more than $4 billion to earnings.
The risk that supplies from Russia will be cut off still looms large, with the European Union committed to wean itself off exports from the country by the end of the year. JPMorgan analysts said that the price of crude could surge to as high as $380 a barrel if Russia retaliates by slashing its overall output.
