Oil prices edged lower on Monday in a volatile session as investors waited for any moves against Russian oil and gas exports that might come out of a meeting of leaders of the Group of Seven nations in Germany.
But, for now, the pressing supply worries outweighed growing concerns over the potential for a global recession following a string of downbeat economic data from the US, the world’s biggest oil consumer. However, oil prices are well supported above $100 a barrel while the backwardation in prompt monthly spreads remained wide. Backwardation is the market structure when prompt futures prices are higher than prices for delivery in later months, indicating limited supplies.
These measures include a possible price cap on Russian oil exports to reduce Moscow’s revenues while limiting the damage to other economies.