Brent oil futures added 0.54% to $81.31 and WTI futures gained 0.72% to $78.79
Oil was up on Tuesday morning in Asia, with investors regaining some risk appetite as some oil producers continued their struggle to increase output.
Brent oil futures added 0.54% to $81.31 by 3:40 AM GMT and West Texas Intermediate (WTI) futures gained 0.72% to $78.79. A weaker dollar, which edged down on Tuesday, also lent support to oil.
Oil has fallen during the past two sessions, thanks to worries about soaring numbers of COVID-19 cases that could impact fuel demand. However, some investors pointed to tight supply from the Organization of Petroleum Exporting Countries and allies (OPEC+) not keeping up with demand and supporting prices.
The market could still benefit from tighter supplies and supply risk from Russia, ANZ Research commodity analysts said in a note. Tensions between the U.S. and Russia remain high over the Russian buildup of troops on its border with Ukraine, which could escalate into an armed conflict.
Other investors pointed to OPEC supply additions remaining below the allowed increase under a 2021 OPEC+ pact. Some member countries, including Nigeria, are not producing their agreed volumes.
The fundamentals remain bullish for crude again, especially if OPEC continues to struggle to hit its quota as part of the 400,000 barrels per day monthly increases, as demand strengthens, OANDA analyst Craig Erlam told Reuters.
Supply in Libya, exempt from the cartel’s curbs, has been hit by both pipeline maintenance work and oil field disruptions. However, production resumed at the El Feel oil field on Monday, after an armed group halted output in December 2021.
Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.
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