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Oil prices swung higher in volatile trading, as traders focused on tight supplies over slowing global economic growth.

Oil prices edged up on high summer fuel demand while supplies remained tight because of sanctions on Russian oil after its invasion of Ukraine.

Brent crude futures for August settled down $2.7, or 2.2%, at $118.51 a barrel, having fallen as low as $117.75. U.S. West Texas Intermediate crude for July fell $3.62, or 3.04%, to $115.31 a barrel, after dropping to a low of $114.60.

Oil settled higher, supported by expectations that OPEC's decision to increase production targets by slightly more than planned will not add that much to global supply which should tighten as China eases COVID restrictions.

Oil prices pared losses, however, during the session after Fed Chair Jerome Powell pledged an "overarching focus" on bringing down inflation and reiterated that ongoing increases in the central bank's policy rate would be appropriate, with the pace depending on the economic outlook.

Petroecuador said 15 companies have expressed interest, including Promigas SA and Gran Tierra Energy.

Investors have been paring positions in risky assets as they assess whether inflation-fighting central banks could push the world economy into recession with higher interest rates.

Rajesh Exports is also an applicant for Prime Minister Narendra Modi's $10 billion incentive plan to push companies to set up semiconductor and display operations in India.