Oil prices declined slightly on Tuesday, June 14. Fears that fuel demand will suffer due to a possible recession and new restrictions on COVID-19 in China outweighed the shortage of global stocks.

This was reported by Reuters.

Brent crude futures fell 0.2% to $122.02 a barrel. U.S. WTI crude fell 0.2% to $120.71 a barrel.

"Discussions in the oil complex continue to revolve around Libya's production decline, as well as China continuing to impose measures to slow the spread of COVID and fears that a global recession will lead to a drop in demand," said Stephen Innes, managing partner at SPI Asset Management.

In China, the COVID-19 outbreak at a bar in Beijing has raised fears of a new phase of lockdowns just as restrictions have been loosened and fuel demand is expected to strengthen.

Oil prices could face even more pressure if the U.S. Federal Reserve surprises markets with a higher-than-expected interest rate hike, said CMC Markets analyst Tina Teng.

Losses have been capped by global supplies, which are affected by falling exports from Libya amid a political crisis, and Russia is facing bans on its oil because of the war against Ukraine.

Analysts at ANZ Research quoted Libyan Oil Minister Mohamed Aoun as saying the country's production fell to 100,000 bpd from 1.2 million bpd last year.

The market will wait for the weekly data on U.S. oil inventories from the American Petroleum Institute on Tuesday and the U.S. Energy Information Administration on Wednesday to see how tight the oil and fuel stocks remain.

Recall that oil prices fell on June 13 as the COVID-19 outbreak in Beijing dashed hopes for a rapid increase in fuel demand in China. Concerns over global inflation and weak economic growth further exacerbated the market situation.