Oil prices rise over 1% as dollar declines amid supply shortage concerns

Oil futures rose 1% in Asian trade as the dollar index lost ground ahead of US data later today while traders analyze developments in the Ukrainian crisis and the Covid 19 Chinese situation .

As of 05:54 GMT, US crude futures due in August rose 1.12% to $110.02 a barrel, while Brent September futures rose 1.47% to $113.25 a barrel, as the dollar index shed 0.07% to 105.06.

From the US, factory orders are expected up 0.5% in May, while President Joe Biden is expected to announce a cut soon in Chinese goods customs taxes.

Earlier Chinese data showed the Markit services PMI up to 54.5 in June from 41.4 in May, indicating solid recovery.

Latest World Health Organization data showed Covid 19 infections rose to 546.36 million cases, with the death toll up to 6.33 million worldwide. 

On the Ukrainian front, Ukrainian troops withdraw from the east officially with Russia about completely seize Lohansk.

Otherwise, OPEC + decided last week to maintain previous decision to increase output by 648 thousand bpd in July and August.

Baker Hughes data showed the US oil rigs rose by one rig last week to 595 rigs, the highest since March 2020, with rigs increasing for the 23rd month in a row, while production rose 100 thousand bpd to 12.1 million bpd, the highest since April 2020.

US oil production fell 0.9 million barrels, or 8% from record highs at 13.1 million bpd in March 2020, while hitting record lows in August 2020 at 9.7 million bpd before recent recovery.