Oil extends gains ahead of G7 discussions on Russian exports

Oil prices extended gains on Monday as investors stood on guard for any moves against Russian oil and gas exports that might come out of a meeting of leaders of the Group of Seven (G7) nations meeting in Germany.

The prospect of more supply tightness loomed over the market as western governments sought ways to cut Russia's ability to fund its war in Ukraine, even though G7 leaders were also expected discuss a revival of the Iran nuclear deal - which might lead to more Iranian oil exports.

Producer nations in OPEC+, which includes Russia, will likely stick to a plan for accelerated oil output increases in August when they meet on Thursday, sources said. But, for now, the pressing supply worries outweighed growing concerns over the potential for a global recession following a string of downbeat U.S. economic data.

Brent crude futures edged up 22 cents, or 0.2%, to $113.34 a barrel by 0342 GMT after rebounding 2.8% on Friday. U.S. West Texas Intermediate crude was at $107.73 a barrel, up 11 cents, or 0.1%, following a 3.2% gain in the previous session.

Both contracts posted their second weekly decline last week as interest rate hikes in key economies strengthened the dollar and fanned recession fear.

However, oil prices remained well supported above $100 a barrel while prompt monthly spreads remained wide in backwardation as crude and oil product supplies remained tight.

Backwardation occurs when prompt prices are higher than prices for delivery in future months, indicating tight supplies.