NEW YORK: Oil prices rose on Tuesday as a higher global economic growth forecast and escalating tensions in the Middle East offset concerns around Chinese demand.
March Brent crude futures, which are due to expire on Wednesday, rose 59 cents to $82.99 a barrel by 11:44 a.m. EST (1644 GMT). The more active April contract was up 69 cents at $82.52.
US West Texas Intermediate crude gained $1.10 to $77.88.
The International Monetary Fund on Tuesday raised its forecast for global economic growth, upgrading the outlook for both the United States and China on faster-than-expected easing of inflation.
Both crude contracts had fallen by more than $1 on Monday as a deepening real estate crisis in China fuelled concerns over demand in the world’s biggest crude consumer, with a Hong Kong court ordering the liquidation of property company China Evergrande Group.
“There’s still concerns about what we’ve seen in China, but the fundamentals, from a supply risk standpoint, are still very bullish,” said Phil Flynn, analyst with Price Futures Group.
Continuing conflict in the Middle East also provided support to the market.
US President Joe Biden said on Tuesday he has made up his mind on how to respond to a drone attack as he weighs punishing Iran-backed militias without triggering a wider war.
“Latest upticks might be driven by some market participants adding some positions now that US President Biden has decided how to react,” said Giovanni Staunovo, analyst at UBS.
On the supply side, while an OPEC+ meeting on Feb. 1 is unlikely to bring a decision on the group’s oil policy for April, analysts are hoping it could shed some light on production plans.
Saudi Aramco, in an indication of future demand outlook, said it had received a directive from the Saudi energy ministry to maintain its maximum sustainable capacity at 12 million bpd and not to continue increasing it to 13 million bpd.
Saudi Arabia is the world’s biggest oil exporter.
Meanwhile, US crude stockpiles were forecast to have drawn down in the week to Jan. 26, falling by some 900,000 barrels, according to analysts in a Reuters poll.
The poll was conducted ahead of reports from the American Petroleum Institute, due at 4:30 p.m. EST on Tuesday and the US Energy Information Administration (EIA) at 10:30 a.m. EST on Wednesday.
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