Tensions in the Middle East also kept a floor under the market, with the potential of a disruption to global oil supplies from the key producing region if the Israel-Hamas war in Gaza spreads.
Credit: Reuters Photo
Oil prices ticked up in early trade on Tuesday, extending gains from the previous session on a stronger demand outlook and investor confidence that OPEC+ producers could pause or reverse plans to raise supplies from the fourth quarter of this year.
Global benchmark Brent crude futures were up 21 cents, or 0.25 per cent, at $84.46 per barrel at 0001 GMT. US West Texas Intermediate crude futures were up 16 cents, or 0.2 per cent, at $80.49 a barrel.
Both benchmarks gained around 2 per cent on Monday, closing at their highest since April.
Last week, the Organisation of the Petroleum Exporting Countries (OPEC), the International Energy Agency and US Energy Information Administration buoyed confidence that oil demand will grow in the second half of this year and weigh on stockpiles.
Investor sentiment has been recovering since OPEC+ surprised players by announcing plans to start increasing production from the start of October, with hopes of stronger future demand supporting prices.
Hedge funds and other money managers bought the equivalent of 80 million barrels in the six most important petroleum futures and options contracts over the seven days ending on June 11. Purchases reversed about 40 per cent of the 194 million barrels sold the week after the OPEC+ announcement.
Tensions in the Middle East also kept a floor under the market, with the potential of a disruption to global oil supplies from the key producing region if the Israel-Hamas war in Gaza spreads.
A US special envoy on Monday visited Jerusalem, seeking to calm the situation on the disputed border with Lebanon, where Israel said tensions with the Iran-backed Hezbollah militia were bringing the region close to a wider conflict.
Meanwhile, the US military said it had destroyed four Houthi radars, one uncrewed surface vessel and one drone in the past 24 hours.
Iran-aligned Houthi rebels in Yemen have been attacking vessels traversing the Red Sea in display of solidarity with the Palestinians in the Gaza war.