Meanwhile, U.S. stockpiles fall for the seventh straight week: File Image/Pixabay
The previous session's downturn in trading proved to be a blip as oil continued its winning streak on Tuesday, this time bolstered by more signs of supply tightness in the U.S.; however, concerns of China's perilous property market as well as its economic health capped gains.
After ANZ analysts said that global utilities are switching to fuel oil due to rising gas and coal prices, and lingering outages after Hurricane Ada that imply less supply is available, Brent gained 52 cents or $74.44 per barrel by 0212 GMT, having fallen by almost 2 percent on Monday.
The contract for West Texas Intermediate, which expires later on Tuesday, was up 61 cents at $70.90 after dropping 2.3 percent in the previous session.
Other developments still point to higher oil prices
ANZ added, "While slowing Chinese economic growth and uncertainty around the [U.S.] Fed's tapering timetable [a reference to expectation that the Federal Reserve will start tightening monetary policy] weighed on market sentiment, other developments still point to higher oil prices."
Indeed, Energy Aspects Ltd. pointed out that the new lifting of U.S. travel restrictions could add as much as 200,000 barrels per day (bpd) of much-needed jet fuel demand, widely viewed as the stumbling block to complete demand recovery.
Meanwhile, the American Petroleum Institute reported U.S. crude stockpiles fell 6.11 million barrels last week, which would be a seventh straight weekly decrease if confirmed by government data on Wednesday.
In view of the global supply issues, as the Organization of Petroleum Exporting Countries (OPEC) continues to lift output two key members told media said the group should carry on ramping up supply as planned; the cartel will meet on October 4 to review the next monthly increment of 400,000 bpd.
That will presumably sit well with Russia: according to a draft budget submitted by its finance ministry to the government, energy companies in the former Soviet Union are seen raising combined production of crude and light oil condensate by 8 percent to 559.9 million tons in 2022, and staying close to that level from 2023 to 2024 - making Russian's output close to a post-Soviet high.