Oil prices continued to climb on Tuesday with investors expecting a tighter market led by a seasonal rise in gasoline demand and supply cuts from OPEC+ producers, though concerns over the risk of a U.S. debt default capped gains.
Reuters report that Brent crude futures rose 28 cents, or 0.37%, to $76.27 a barrel by 0320 GMT while U.S. West Texas Intermediate (WTI) crude was at $72.36 a barrel, up 31 cents, or 0.43%.
According to Reuters, it was the second day of gains after Brent rose 0.5% on Monday. WTI gained 0.6%, amid a 2.8% increase in U.S. gasoline futures ahead of the Memorial Day holiday on May 29 which traditionally marks the start of the peak summer fuel demand season.
“Oil prices are consolidating their bottoms, helped by a seasonal increase in U.S. gasoline demand from next week, production cuts by OPEC+ from this month and planned U.S. purchases to refill the Strategic Petroleum Reserve (SPR),” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
Voluntary production cuts by the Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, that went into effect this month are also expected to keep oil markets tight. Reuters
