By Gina Lee
Investing.com – Oil was up on Wednesday morning in Asia, even as a strengthening dollar prompted fresh selling. But a build in U.S. crude stocks and an extended COVID-19 lockdown in Shanghai fueled demand concerns.
Brent was up 0.25% to $106.91 by 11:25 PM ET (3:25 AM GMT) and Crude Oil WTI Futures inched up 0.02% to $101.98. Brent futures fell 0.8% and WTI dropped 1.3% on Tuesday when the dollar also hit its highest level in almost two years.
"Higher dollar, an increase in U.S. crude stockpile and concerns over weaker demand in China due to Shanghai's continued lockdown added to pressure," Nissan Securities general manager of research Hiroyuki Kikukawa told Reuters.
"Oil prices will likely stay at around $100 a barrel for a while amid demand concerns and an expectation for no conflict in the Middle East during the Muslim fasting month of Ramadan, but they may rise again after Ramadan and as the U.S. driving season kicks off," he added.
Tuesday’s U.S. crude oil supply data from the American Petroleum Institute showed a build of 1.08 million barrels for the week ended Mar. 31. Forecasts prepared by Investing.com predicted a draw of 1.558 million barrels, while a 3-million-barrel draw was reported during the previous week.
Investors now await supply data from the U.S. Energy Information Administration, due later in the day.
In Asia Pacific, fuel demand concerns are rising as China, one of the top oil importers globally, extended the lockdown for Shanghai.
The possibility of more sanctions on Russia over its invasion of Ukraine on Feb. 24 also gave the black liquid a boost. The U.S., European Union (EU), and Group of Seven are coordinating on a fresh round of sanctions in response to alleged war crimes by Russian troops in Ukraine, which is raising concerns about supply disruptions.
Also on the supply side, the International Energy Agency members were still discussing how much oil the organization would release, with an announcement due in the coming days, three sources told Reuters.