By Yuka Obayashi

TOKYO, Reuters – On Wednesday oil futures fell further than the day before. A stronger U.S. Dollar prompted new selling, while data showing a rise in stocks and Shanghai’s prolonged lockdown fuelled concerns of slowing demand.

U.S. West Texas Intermediate futures fell 1.0% to $100.98/barrel at 0029 GMT. Futures futures lost 0.9% or 97 Cents to $105.67/barrel. U.S. Brent futures also dropped 1.0% or 98 Cents to $105.67/barrel. Brent lost 0.8% and WTI fell 1.3% on Tuesday.

Hiroyuki Kikukawa is general manager for research at Nissan Securities (OTC): “A higher dollar, an increased U.S. crude inventorypile and concerns about weaker China demand due to Shanghai’s continued lockdown added to the pressure.”

He said that oil prices would likely remain at $100 per barrel during Ramadan due to demand concerns. However, they could rise after Ramadan as well as because of the expectation for peace in the Middle East.

US dollar reached its highest point in two years Tuesday thanks to hawkish statements by Federal Reserve officials, who called for an immediate reduction in central bank’s excessive balance sheet. Oil becomes more costly for other currency holders if the dollar is stronger.

Market sources on Tuesday cited American Petroleum Institute data to show that U.S. crude, distillate and gasoline stocks were up last week. While gasoline inventories fell, they rose. [API/S]

The crude oil stocks increased by 1.1 Million barrels in the week ending April 1st, compared to analysts’ predictions of a decrease of 2.1million barrels.

After China, the world’s largest oil importer, extended an embargo in Shanghai to all 26 million residents of Shanghai, demand worries grew.

The potential for increased sanctions in the wake of alleged war crimes committed by Russian troops against Ukraine led to limited losses. However, supply disruptions were a concern.

On Tuesday, the Ukrainian president Volodomyr Zelenskiy stated to the United Nations Security Council that Russia should be held responsible for war crimes. This was as America and its allies were ready to increase sanctions.

Britain called on NATO countries and G7 to prohibit Russian vessels from their ports on Tuesday. They also agreed a schedule to reduce oil and gas imports to Russia and tighten restrictions on key industries.

Three sources said that member countries of the International Energy Agency were discussing their plans to release oil from storage in order to cool markets. An announcement is expected within days.