Oil edges higher as tighter supply looms

After climbing for three weeks straight, oil prices increased little on Monday as anticipation of supply reductions from Saudi Arabia and other OPEC+ members outweighed worries about slowing global growth that would reduce demand for gasoline.

After OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, shocked the market with a fresh round of production restrictions starting in May, crude prices increased by more than 6% last week.

By 1200 GMT on Monday, Brent crude had increased by 19 cents, or 0.2%, to $85.31 per barrel, while U.S. West Texas Intermediate crude had increased by 9 cents to $80.79.

An end to northern Iraqi exports has added to supply shortages. Although a deal was reached last week to reopen the flows, as of Thursday, they still hadn’t done so.

A steeper-than-anticipated reduction in U.S. crude stockpiles last week, as well as a decline in petrol and distillate stocks, which suggested increased demand, also helped to bolster the price of oil.

A U.S. inflation report due out on Wednesday may be able to provide investors with insight into the direction of interest rates in the near future.