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Oil Up as Investors Assess Demand Outlook

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By Zhang Mengying

Investing.com – Oil was up on Wednesday morning in Asia, supported by tight supplies and recovering fuel demand as China continued easing COVID-19 curbs in top cities.

Brent oil futures edged up 0.12% to $120.73 by 11:53 PM ET (3:53 AM GMT) and crude oil WTI futures rose 0.23% to $119.70.

Tuesday's U.S. crude supply data from the American Petroleum Institute showed a build of 1.845 million barrels for the week ended June 3.

Global crude and oil product supplies remain tight as the West poise sanctions on oil exports from major producer Russia. Most refineries globally are at a stage close to their maximum capacities to meet rising demand from pandemic recovery and replace lost Russian supplies.

“Unless new Middle East capacity comes online more quickly than we expect or China decides to lift its products export caps, the shortage of clean products will only get worse as demand for transport fuels picks up during the northern hemisphere summer,” JP Morgan analysts said in a note.

Chinese cities such as Beijing and Shanghai are easing COVID-19 curbs and allowing more mobility, which adds to expectations that fuel demand might recover.

"Oil remains well supported on dips right now," Oanda Asia Pacific Pte senior market analyst Jeffrey Halley told Bloomberg.

“With China reopening, higher prices remain the path of least resistance,” Halley added.

Investors now await crude supply data from the U.S. Energy Information Administration, due later in the day.

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