Oil prices rose more than 1% amid supply risks related to sanctions and US-China trade talks. Investors are also weighing on reports that the US is exploring oil for its strategic reserves.
Brent crude futures rose 94 cents, or 1.5%, to $62.26 a barrel by 04:00 GMT, while WTI Crude futures rose 92 cents, or 1.6%, to $58.16.
Oil rebounded from a five-month low hit on Monday as producers increased supply and trade tensions dampened demand.
Trump-Putin summit postponed. News of the postponement of the summit between Trump and Putin, along with fears of disruptions fueled by Western pressure on Asian purchases of Russian oil, has exacerbated supply risks.
Despite the general downward trend caused by excess oil supply and weak demand, the risk of supply disruptions persists in critical regions like Russia, Venezuela, Colombia, and the Middle East, preventing oil prices from falling below $60 a barrel.
Concerns about US-Venezuela tensions are also on the agenda. Investors are monitoring the tensions between the US and Venezuela, a major oil producer.
US President Donald Trump has ordered attacks on at least six ships suspected of carrying drugs in the Caribbean in recent months as part of a campaign to combat the “narco-terrorist” threat emanating from Venezuela.
Investors will also be closely monitoring the progress of US-China trade talks, with officials from both countries meeting in Malaysia this week.
Trump said on Monday that he hopes to work on a fair trade agreement with Chinese President Xi Jinping, with whom he plans to meet in South Korea next week.
Trump’s statements on trade negotiations are providing some support to the market. The cancellation of the Trump-Putin summit will also boost support.
Market sources reported Tuesday that US crude oil, gasoline, and distillate inventories fell last week, citing data from the American Petroleum Institute (API).
Oil also received support from the US’s strategic reserve replenishment plan.
The US Department of Energy announced on Tuesday that it aims to purchase 1 million barrels of crude oil for the Strategic Petroleum Reserve to replenish its stockpile, taking advantage of relatively low oil prices.