Oil rises as tight supplies outweigh recession fears

Oil prices rose on Monday as supply concerns driven by lower OPEC production, unrest in Libya and sanctions against Russia outweighed concern about a global recession slashing demand for crude.

Inflation in the euro area hit another record high in June, which strengthens the case for rapid interest rate increases from the European Central Bank, while consumer sentiment in the United States hit a record low.

The global benchmark Brent crude contracts ended the trading session up $1.87, or 1.68%, to settle at $113.50 a barrel, after having fallen more than a dollar in early trading.

US West Texas Intermediate crude contracts rose $2.23, or 2.06%, to close at $110.66 a barrel in weak trading during the Independence Day holiday in the United States.

A Reuters survey showed that the Organization of the Petroleum Exporting Countries (OPEC) did not meet its target to increase production in June.

In OPEC member Libya, the Libyan National Oil Corporation announced in a statement on Thursday the state of force majeure in the ports of Sidra and Ras Lanuf and the El Feel oil field, saying that oil production decreased by 865,000 barrels per day.

Meanwhile, production in Ecuador, another OPEC member, has been hit by disruptions, while a strike in Norway could cut supplies this week.