Oil steadies as Libya shuts down factories

After a nearly three-week COVID 19 shutdown in Shanghai, oil prices were barely changed as Libya had to halt some exports and manufacturers in China prepared to reopen factories after a nearly three-week COVID 19 shutdown in Shanghai.

Brent crude futures rose 21 cents, or 0.2%, to $113.37 a barrel at 0020 GMT, while U.S. West Texas Intermediate WTI crude futures fell 2 cents to $108.19 a barrel.

The dollar was trading at a new two-year high, and the gains were limited. Both benchmark contracts rose more than 1% in the previous session after their highest since March 28 after Libya said it could not deliver oil from its biggest field and shut another field due to political protests.

Fuel demand in China, the world's largest oil importer, was expected to pick up as manufacturing plants prepared to open in Shanghai.

Demand remains as China continues to impose tough curbs to contain COVID outbreaks.

The SPI Asset Management managing director, Stephen Innes, said in a note that they are still in a tug between global supply deficits and China's COVID demand crunch at the end of the day.

The European Union has a ban on Russian oil for its invasion of Ukraine and keeps the market on edge. Ukraine said on Tuesday that Russia, which called its actions a special operation, had started an anticipated new offensive in the east of the country.

Market sentiment was supported by Russian minister saying more countries are banning Russian oil imports would mean oil prices exceeding historic highs, ANZ Research analysts said in a note.