Oil prices rose for the third consecutive session on Tuesday as signs of tightening supply and Chinese officials’ commitments to support the world’s second-largest economy boost expectations of demand growth.
Brent futures gained 25 cents, or 0.3%, at 0633 GMT to $82.99 a barrel, while West Texas Intermediate (WTI) crude rose 27 cents, or 0.3%, to $79.01.
Both indicators rose more than 2% the previous day at their highest closing levels since April.
Crude oil prices have climbed for four straight weeks as supply is expected to contract due to cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, a group known as OPEC+. Some analysts say it could go higher in the short term.
Energy traders believe that global central bank tightening will end soon, which should provide some boost to global growth.
In China, the world’s second-largest economy and second-largest oil consumer, leaders have pledged to increase policy support for the economy as part of the tough post-COVID-19 recovery, with a focus on boosting domestic demand.
Still, downside data in the eurozone and the US emphasize the weakness in the global economy.
In the eurozone, business activity contracted much more than expected in July as demand in the bloc’s dominant services industry fell and factory production fell at the fastest rate since the first outbreak of COVID-19, according to a survey.
U.S. business activity fell to a five-month low in July and slumped as services sector growth slowed, but falling input prices and slower hiring suggest the Federal Reserve can make progress on key fronts in its inflation-reducing target.
Investors have priced in quarter-point increases from the Fed and the European Central Bank (ECB) this week, so the players will be focused on what Fed Chairman Jerome Powell and ECB Chairman Christine Lagarde have to say about future rate hikes.
U.S. crude oil product stocks fell last week. Industry data on US crude inventories will be posted on Tuesday. According to analysts, crude oil inventories fell by about 2 million barrels in the week to July 21.
