NEW YORK: Oil prices climbed about 4% on Tuesday on signs of higher demand in Europe and China, rising tensions in the Middle East and as buyers emerged the day after prices collapsed to a four-year low on a decision by OPEC+ to boost output.
Brent futures rose $2.37, or 3.9%, to $62.60 a barrel at 11:12 a.m. (1512 GMT). US West Texas Intermediate (WTI) crude gained $2.42, or 4.2%, to $59.55.
Both benchmarks rose out of technically oversold territory, the day after their lowest settlements since February 2021.
OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, decided over the weekend to speed up oil production hikes for a second consecutive month.
“After evaluating the latest OPEC+ move to accelerate the easing of supply cuts, market players are focusing on developments in trade and the possibility … that trade deals will be reached,” said Tamas Varga, an analyst at PVM, a brokerage and consulting firm that is part of TP ICAP.
Varga also pointed to the rise in geopolitical risk premium in the Middle East as Israel struck Iran-backed
Houthi targets in Yemen as a retaliation for an assault on Ben Gurion airport.
Prices also drew support after consumers in China increased spending during the May Day celebration and as market participants returned after the five-day holiday.
“China also reopened today, and being the largest (oil) importer, buyers would have likely jumped to secure oil at current low levels,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. In the US, the dollar fell to a one-week low against a basket of currencies as investors grew impatient about trade deals. A weaker US currency makes dollar-priced oil less expensive for buyers using other currencies.
