By Gina Lee

Investing.com – Oil was down on Thursday morning in Asia. Investors cashed in profits from the previous session’s 2% gains after the indicated an “imminent” interest rate hike that triggered a technical correction in surging energy markets.

The price of $88 fell by 0.833% at 11:27PM ET (4.27 GMT), after having risen about 2% to the $90 mark on Wednesday. The index fell 0.85% to $86.61.

Asian shares dropped while the was moving up after the Fed indicated Wednesday that it may raise interest rates by March 2022. As fears about disruptions to Europe and U.S. tensions continue to escalate, investors continue to watch the U.S.-Russia situation.

Oil prices are supported by the “continued supply problems and increasing Russia-Ukraine tensions.” Although it’s slightly lower today, I don’t believe that is a major move. OCBC economist Howie L. Lee stated this to Reuters.

He said that while Russia-Ukraine tensions may have played a role, real supply issues both in the Organization of the Petroleum Exporting Countries and the U.S …. are the key drivers of the higher oil market prices.

It missed the December 2021 target for an increase in supply, which exacerbates capacity constraints and limits supply.

OPEC+ (or OPEC+ and its allies) is slowly reversing 2020’s output cuts, as fuel demand rises. However, smaller producers were unable meet their production targets. Others remain cautious to avoid overpumping, in case COVID-19 becomes a new demand.

The U.S. crude oil inventories increased, showing an increase of 2.37 million barrels over the week up to January 21. This alleviated supply concerns. Investing.com had predicted a draw of 728,000 barrels. During the week before, a 515,000 barrel build was recorded.

From the day before, there was an increase of 872,000 barrels