Oil Prices Stable Despite Libya's Supply Disruption, And Shanghai Preparing to Reopen

At 0020 GMT, Brent oil prices were up 21 cents, or 0.2%, to $113.37 per barrel, while US West Texas Intermediate (WTI) crude futures were down 2 cents to $108.19 per barrel.

With the dollar trading at a new two-year high, gains were restricted. A higher dollar is detrimental to foreign-currency oil purchasers.

Both benchmark contracts gained more than 1% in the previous session after reaching their highest level since March 28 after Libya's announcement that it was unable to supply oil from its largest field and had shut down another due to political demonstrations.

The latest supply disruption occurred as China, the world's top oil importer, was anticipated to ramp up demand as industrial units in Shanghai prepared to reopen.

However, demand issues persist as China continues to implement strict controls to minimize COVID outbreaks.

"At the end of the day, we are still in a tractor pull between global supply shortages and China's COVID demand constraint," Stephen Innes, managing director of SPI Asset Management, said in a note.

Meanwhile, the prospect of a European Union embargo on Russian oil in retaliation for Russia's invasion of Ukraine continues to spook the market. Ukraine claimed Tuesday that Russia, which refers to its efforts as a "special operation," has launched an expected fresh onslaught in the country's east.

"The Russian minister's statement that further nations prohibiting Russian oil imports will result in oil prices reaching record highs bolstered market sentiment," ANZ Research analysts said in a report.