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.

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

The U.S. crude oil supply data for Tuesday from the revealed a rise of in the week ending June 3.

As sanctions are imposed by the West on major Russian oil producer Russia, global crude oil and product supplies continue to be tight. Globally, most refineries are close to reaching their full capacity to handle rising demand for pandemic recovery oil and to replace Russian supply.

“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.

China’s cities of Beijing and Shanghai have relaxed COVID-19 restrictions and allow more mobility. This increases the possibility that oil demand will recover.

Jeffrey Halley (Oanda Asia Pacific Pte Senior Market Analyst) stated that “oil continues to be well supported on dips right currently,” Bloomberg reported.

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

Investors are now awaiting crude supply data from The, which is due to be released later today.