By Gina Lee

Investing.com – Oil was mixed on Tuesday morning in Asia, with a adding to concerns about a tight market. As Shanghai prepares for a slow restart of production, investors continue to watch China’s supply.

The price of the black liquid rose 0.10% to $113.27 at 1:30 AM ET (5:00 AM GMT), while it fell 0.13% down to $107.47. Gains for black liquor were also limited by the strengthening dollar. It traded at an all-time high of $113.27 by 1:30 AM ET (5:30 GMT)

Brent benchmark and WTI contracts both gained over 1% in the session before they hit their highest level since Mar. 28. Libya has been rocked by a fresh political crisis. The country said it couldn’t deliver oil from its largest oil field, and closed another one due to political protests.

Ajay Kedia, director of Kedia Commodities told Reuters that the disruptions in Libya have deepened concerns over tight global supplies and the Ukraine crisis dragged along. This offset concern about slowing Chinese demand.”

As China is poised to resume its second largest oil importer, fuel demand in Libya will likely recover. The city of Shanghai has been slowly preparing to reopen some of its manufacturing facilities. But, the COVID-19 locksdowns in Libya mean that oil prices can still be affected by demand shocks.

Stephen Innes, managing director of SPI Asset Management stated in a note that “for oil prices to take off along a sustained trajectory,” and added that reopening the mainland cities was necessary to translate into an economic rebound that supports demand.

He added that the Libya outage shows how responsive oil markets have been to supply shocks.

Markets remain nervous due to the possible ban by the European Union on Russian oil because of the conflict in Ukraine. The latest developments in the conflict, precipitated on February 24th by Russia’s invasion of Ukraine, have seen Russia launch a new offensive within the Donbas region in eastern Ukraine.

“Market sentiment was encouraged by Russian Minister saying more countries ban Russian oil imports will mean that oil prices exceed historic highs,” ANZ Research analysts stated in a note.

Investors are currently awaiting, which is due later today.