By Zhang Mengying
Investing.com – Oil was down on Wednesday morning in Asia after rising during the previous three sessions, but the concerns of global supply tightness capped the losses.
Brent oil futures fell 0.86% to $112.81 by 11:22 PM ET (0322 GMT) and crude oil WTI futures fell 0.73% to $110.94.
The Group of Seven leaders reached an agreement to cap the prices of Russian oil, adding to concerns of a tighter supply.
“Investors made position adjustments but remained bullish on expectations that Saudi Arabia and the United Arab Emirates would not be able to raise output significantly to meet recovering demand, driven by a pick-up in jet fuels,” Nissan Securities general manager of research Hiroyuki Kikukawa told Reuters.
“Oil prices will likely stay above $110 a barrel, also on worries of potential supply disruptions due to hurricanes as the United States enters the summer,” he said.
Saudi Arabia and the UAE were considered the only two members of the Organization of the Petroleum Exporting Countries (OPEC) which have spare capacity to make up for lost Russian supply and weak output from other member nations.
However, UAE Energy Minister Suhail al-Mazrouei said on Monday the emirate was producing near the maximum capacity of its quota of 3.168 million barrels per day (bpd) under the agreement with OPEC and its allies, together called OPEC+.
Investors are worried that political unrest in Ecuador and Libya could also tighten supply.
Tuesday’s U.S. crude supply data from the American Petroleum Institute showed a draw of 3.8 million barrels for the week ended June 24.
The crude supply data from the U.S. Energy Information Administration last week was delayed due to a system issue, the data for both weeks will be published together later in the day.