Oil swings as traders grapple with recession concerns, demand

Oil fluctuated as investors weighed concerns that a global slowdown will erode demand against still-solid physical market signals.

West Texas Intermediate futures dipped below US$108 a barrel, having earlier topped US$109, with trading volumes curtailed by the US Fourth of July holiday.

Crude has been buffeted over the past month by indications of an impending recession, yet supply outages, including in Libya, have offset some of the weakness. Key time spreads also show a robust market.

Oil remains more than 40 per cent higher this year after being boosted by the war in Ukraine, which triggered a wave of sanctions on Russian flows. Many product prices are still elevated and Vitol Group, the biggest independent oil trader, warned at the weekend that surging fuel costs are starting to hurt demand.