By Georgina McCartney
(Reuters) – Oil prices rose in early trading on Tuesday, extending gains from the previous session on a stronger demand outlook and investor confidence that OPEC+ producers could pause or reverse oil production plans. increase supply from the fourth quarter of this year.
Global benchmark Brent crude futures were up 21 cents, or 0.25%, at $84.46 per barrel at 0001 GMT. West Texas Intermediate crude oil futures were up 16 cents, or 0.2%, at $80.49 a barrel.
Both benchmarks gained about 2% on Monday, closing at their highest level since April.
Last week, the Organization of the Petroleum Exporting Countries (OPEC), the International Energy Agency and the US Energy Information Administration raised confidence that oil demand will grow in the second half of this year and weigh on reserves.
Investor sentiment has been recovering since OPEC+ surprised stakeholders by announcing plans to start increasing production from early October, with hopes of stronger future demand supporting prices.
Hedge funds and other money managers bought the equivalent of 80 million barrels in the six most important oil futures and options contracts during the seven days ending June 11. Purchases reversed around 40% of the 194 million barrels sold in the week after the OPEC+ announcement.
Tensions in the Middle East have also kept a floor under the market, with the potential for a disruption in global oil supplies from the main producing region if the war between Israel and Hamas in Gaza spreads.
A US special envoy visited Jerusalem on Monday, seeking to calm the situation on the disputed border with Lebanon, where Israel said tensions with the Iran-backed Hezbollah militia were bringing the region closer to a wider conflict.
Meanwhile, the US military said it had destroyed four Houthi radars, an unmanned surface vessel and a drone in the past 24 hours. Iran-aligned Houthi rebels in Yemen have attacked ships crossing the Red Sea in a show of solidarity with Palestinians in the Gaza war.
(Reporting by Georgina McCartney in Houston; Editing by Sonali Paul)
