LONDON, April 28 Reuters Oil prices dipped but were trading in and out of positive territory on Thursday as investors weighed up tightening Russian supplies and the prospect of dwindling fuel demand in China.

Brent crude futures were down 63 cents, or 0.6, at 104.69 a barrel by 1129 GMT. U.S. West Texas Intermediate crude lost 49 cents, or 0.5, to 101.53.

Both contracts had gained 30 cents on Wednesday on concerns over tight global oil supplies and another drawdown in U.S. distillate and gasoline stocks. On Thursday the contracts traded in range of about 3 a barrel.

The U.S. Energy Information Administration said that crude stocks rose by only 692,000 barrels last week, short of expectations, but distillate inventories including diesel and jet fuel fell to their lowest since May 2008.

Russian oil production could fall by as much as 17 in 2022, according to an economy ministry document seen by Reuters, as the country contends with Western sanctions. 

Despite this expected shortfall, the OPEC group of producers comprising the Organization of the Petroleum Exporting Countries and allies led by Russia is expected to agree another modest output increase in June when it meets on May 5, sources told Reuters. 

Concern over slowing demand weighed on market sentiment, however.

Fears of spluttering economic growth have sent the dollar to highs not seen since March 2020, equity markets are tepid at best, Chinese restrictions have not been erased from the back of investors39;…