Oil prices rose on Tuesday, supported by the weak dollar and the US plan to restock its oil reserves, but gains were limited by uncertainty over the impact of rising COVID-19 cases in China, the largest oil importer.
Brent crude futures rose 15 cents, or 0.2%, to $79.95 a barrel at 0710 GMT, adding to the 76 cents gain in the previous session.
West Texas Intermediate (WTI) crude futures rose 32 cents, or 0.4%, to $75.51 a barrel after rising 90 cents in the previous session.
Both contracts rose more than $1 in the early hours of the session.
Oil prices rose as the US announced last week’s plan to purchase up to 3 million barrels of oil for the Strategic Petroleum Reserve.
The weaker dollar also supported prices, making oil cheaper for those holding other currencies.
But analysts said clear signs of increasing demand are needed for prices to rise further.
The oil demand outlook will be key to how high crude oil prices can rise, and situation clarification is needed as mixed signals are seen as China reopens.
As China’s pandemic restrictions ease, the rise in COVID-19 cases is weighing on oil markets amid uncertainty over the country’s economic recovery.
Cities across the country are racing to increase hospital beds and build screening clinics amid growing concerns that the decision to ease strict COVID restrictions will lead to possible deaths, virus mutations, and economic impact.
Crude oil’s gains are modest but look uncertain. The downward pressure from global economic concerns is likely to continue.
U.S. crude inventories were expected to drop by about 200,000 barrels last week, with gasoline and distillate inventories higher, according to a survey.
The survey was conducted ahead of reports from the American Petroleum Institute (API) on Tuesday and the Energy Information Administration (EIA), the statistical arm of the US Department of Energy, on Wednesday.
