Oil prices rose on Tuesday, risk appetite soared as investors await hints of potential rate hikes from the Federal Reserve and some oil producers continue to struggle to increase production.
Brent crude futures rose 40 cents, or 0.5%, to $81.27 a barrel at 0529 GMT, after falling 1% in the previous session.
West Texas Intermediate (WTI) crude futures rose 52 cents, or 0.7%, to $78.75 a barrel after falling 0.8% on Monday.
The weak US dollar helped support oil prices on Tuesday as it made oil cheaper for those holding other currencies.
The US Senate committee will hold hearings this week on the US central bank’s plans to tighten monetary policy.
The recent oil price declines were driven by concerns that rising COVID-19 cases around the world could potentially reduce fuel demand.
The bland course of the disease has not necessitated a serious lockdown in any of the major economies, although rising cases of the virus raise concerns as restrictions affect mobility and thus fuel demand.
The virus concerns, supply issues and stock market trends will continue to be key factors affecting crude oil in the near term.
The tight supply policy implemented by the Organization of the Petroleum Exporting Countries (OPEC), Russia and its allies, but the inability of some members to keep up with the demand also supports prices.
The market is witnessing OPEC supply increases below their permitted increases under the OPEC+ pact as some countries, including Nigeria, are not producing the agreed volumes.
Libya, which is exempt from OPEC supply restrictions, has been affected by pipeline maintenance work and oil field disruptions. But on Monday, production resumed at the El Feel oil field, where production was halted last month.
Meanwhile, political tensions escalated as Russia massed troops on the Ukrainian border. Presumably, the tight supply risk on the Russian front will also contribute to the market.
The market awaits US oil and product inventory data from the American Petroleum Institute (API) on Tuesday at 2130 GMT, followed by data from the US Energy Information Administration (EIA) on Wednesday.