Oil prices settled lower on Tuesday on fears the U.S. Federal Reserve will surprise markets with a higher-than-expected interest rate hike.
Brent crude futures settled down $1.10, to $121.17 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $2, to settle at $118.93 a barrel.
Tight supply has been aggravated by a drop in exports from Libya amid a political crisis that has hit output and ports.
Other OPEC+ producers are struggling to meet production quotas and Russia faces bans on its oil over the war in Ukraine.
The U.S. Department of Energy (DOE) also announced the fourth Notice of Sale of 45 million barrels of crude oil from the Strategic Petroleum Reserve.
UBS raised its Brent price forecast to $130 a barrel for end-September and to $125 for the subsequent three quarters, up from $115 previously.