Libyan Supply Outage Causes Oil to Be Unstable

Brent crude was under 26 cents, or 0.23%, to $112.90 a barrel at 0643 GMT; it rose to more than $1 to $114.21 earlier in the session.

U.S. West Texas Intermediate crude dropped 45 cents, or 0.42%, to $107.76 a barrel, after climbing to $108.92 earlier.

Prices came under pressure, with the dollar trading at a fresh two-year high. A stronger dollar makes commodities priced in dollars more costly for holders of other currencies.[USD/]

Both benchmarks climbed more than 1% on Monday after hitting their highest after March 28 on the political crisis in Libya. Due to political protests, the country declared it could not deliver oil from its most extensive oil field; moreover, it shut down another area.

The most delinquent supply hit arrived just as fuel demand in China, the world’s biggest oil importer, should pick up as manufacturing plants prepared to reopen in Shanghai.

China Is Reimposing Measures

Oil prices, nevertheless, are still weak to demand shocks as China continues to set strict coronavirus-related curbs.

According to SPI Asset Management’s managing director, Stephen Innes, for oil prices to take off on a sustainable trajectory, reopening mainland cities is essential for translating into a sustainable economic rebound that supports oil demand.

OANDA analyst Jeffrey Halley stated that markets in Asia seemed content to adopt a wait-and-see approach, reluctant to chase rallying prices any higher.

The possibility of a European Union ban on Russian oil for its invasion of Ukraine persists in keeping the market on edge.

Russian forces have established their anticipated offensive in eastern Ukraine; they attempted to push through defenses along almost the entire front line in what Ukrainian officials described as the second phase of the war.