Oil prices decline over 1% as dollar climbs

Oil futures declined over 1% in Asian trade as the dollar index climbed for the sixth straight sessions, as markets price in developments in the Covid 19 wave in China, after reports that cases are falling down again.

On the Ukrainian front, the EU is not expect to execute a threat to cut off Russian oil supplies after protests from several EU members. 

As of 06:08 GMT, US crude futures declined 1.16% to $105.63 a barrel, while Brent futures due in July declined 1.24% to $106.14 a barrel, as the dollar index rose 0.14% to 104.15.

From the US, producer prices are expected up 0.5% last month, while core prices are expected up 0.6%, slowing don from 1%.

US unemployment claims are expected down 10K in the week ending May 7 to 190K, while continuing claims are expected down 4K to 1.38 million. 

Official US data showed crude inventories rose 8.5 million barrels last eek, while analysts expected a 1 million barrels deficit, with total stocks now rising to 424.2 million barrels. 

Gasoline stocks fell 3.6 million barrels, down 5% from 5-year averages, while distillate stocks fell 0.9 million barrels.

Chinese authorities is clamping down heavily on any opposition to its zero-covid harsh policies against the pandemic, in order to contain the crisis quickly and return to solid growth.

China's central bank has issued statements asserting full support of the economy to provide enough liquidity and underpin small businesses.

Latest World Health Organization data showed global Covid 19 infections up to 516.48 million cases, with the death toll hitting 6.258 million.

Baker Hughes data showed US oil rigs rose by 5 rigs to 557 rigs, the highest since March 2020, while US output steadied at 11.9 million barrels.

US output is down 1.2 million bpd or 10% from a record high at 13.1 million bpd scaled in March 2020, while hitting a record low in August 2020 at 9.7 million bpd.