Oil prices erased early gains, falling after a day of sharp decline caused by US interest rate hikes, but attention is still focused on the supply shortage.
By 0906 GMT, Brent crude futures fell 45 cents, equivalent to 0.4 percent, to $ 118.06 a barrel, while West Texas Intermediate crude futures fell 44 cents, about 0.4 percent, to $ 114.87 a barrel.
The two crudes remained largely within the previous session's price range.
Prices fell more than 2% yesterday after the US Federal Reserve raised interest rates by 75 basis points, the largest increase since 1994.
The dollar index fell from its highest level since 2002 on Wednesday, easing downward pressure on oil prices.
A stronger dollar makes oil more expensive for holders of other currencies and limits demand.
Investors remained focused on tight supplies and a recovery in demand after Western sanctions curbed Russian oil exports.
In Libya, production has collapsed to between 100,000 and 150,000 barrels per day, an oil ministry spokesman said on Tuesday, a small percentage of the 1.2 million barrels per day production last year.
This hurts already scarce supply, while the International Energy Agency expected demand to increase further in 2023, rising by more than two percent to 101.6 million barrels per day.
Prices are also expected to receive support from the recovery in oil demand in China with the easing of anti-Covid-19 restrictions.
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- Agencies