World Oil Prices Soar Due To Limited Supply

Illustration of an offshore oil rig in Huntington Beach, California, United States. (Photo: ANTARA)

JAKARTA - World oil prices were observed to strengthen slightly in the volatile trading session at the end of trading Monday (Tuesday morning WIB), as tight global supply outweighed concerns that demand would be pressured by rising COVID-19 cases in Beijing and more interest rate hikes.

Quoted from Antara, Brent crude futures for August delivery rose 26 cents, or 0.2 percent, to settle at 122.27 dollars a barrel, while U.S. West Texas Intermediate (WTI) crude futures for July delivery added 26 cents, or 0. .2 percent, to close at 120.93 dollars a barrel.

Trading was volatile on Monday, June 13, with WTI hitting an intraday low of 117.47 US dollars a barrel.

The global benchmark traded as low as $118.95 a barrel earlier in the session.

Both benchmarks touched their lowest intraday levels since June 7.

Oil supplies are limited, with OPEC and its allies unable to fully meet promised production increases due to a lack of capacity at many producers, sanctions against Russia and unrest in Libya that has cut output.

Oil had surged in 2022 as Russia's invasion of Ukraine in February added to supply concerns and as demand recovered from lockdowns related to the COVID-19 pandemic.

In March, Brent hit $139, its highest since 2008.

Last week, both benchmark oil prices rose more than one percent.

"We are struggling with the loss of Russian (oil) so now add an exclamation point to the Libya situation," said Robert Yawger, executive director of energy futures at Mizuho.

Earlier, on Saturday, June 11, the median price of US gasoline exceeded US$5.0 per gallon for the first time, AAA data showed.

"We don't know what will happen to China. The current situation is very gloomy," said Phil Flynn, an analyst at Price Futures.