Oil rises as tight supply trumps recession fears

Oil rose as supply concerns driven by lower OPEC output, unrest in Libya and sanctions against Russia outweighed fears of a demand-sapping global recession.

Euro zone inflation hit yet another record high in June, strengthening the case for rapid European Central Bank rate increases, while U.S. consumer sentiment hit a record low.

Brent crude rose $1,87, or 1.68%, to $113.50 a barrel after falling more than $1 in early trade. U.S. West Texas Intermediate (WTI) crude rose $2.20, or 2%, to $110.63, in thin volume during the U.S. Independence Day holiday.

The Organization of the Petroleum Exporting Countries (OPEC) missed a target to boost output in June, a Reuters survey found. 

In OPEC member Libya, authorities declared force majeure at Es Sidr and Ras Lanuf ports as well as the El Feel oilfield on Thursday, saying oil output was down by 865,000 barrels per day (bpd).

Meanwhile, Ecuador's production has been hit by more than two weeks of unrest that has caused the country to lose nearly 2 million barrels of output, said state-run oil company Petroecuador.

Adding to potential supply woes, a strike this week in Norway could cut supply from Western Europe's largest oil producer and reduce overall petroleum output by about 8%.