ALBAWABA – Oil prices rose on market expectations of higher demand for gasoline against tighter supplies in light of production cuts by oil producers, with the ongoing US debt ceiling crisis still weighing down oil gains, according to Reuters.
Brent and West Texas Intermediate (WTI) crude futures rose to $76.34 and $72.41 per barrel, respectively, Tuesday, after having gained 0.5 and 0.6 percent on Monday, Reuters reported.
May 29 marks the Memorial Day holiday and the start of the summer season, when fuel demand increases in the United States (US).
US gasoline futures gained 2.8 percent on Monday ahead of Memorial Day.
Rising inflation worldwide and higher US interest rates have caused oil prices to fluctuate over the past few months. But the oil market was able to retain significant gains with positive data and economic recovery indicators driving demand.
Voluntary oil production cuts this month, by members of the Organization of the Petroleum Exporting Countries and its allies, including Russia, (OPEC+), are also expected to keep oil markets tight.
Meanwhile, data on rising oil demand in China also bolstered oil prices over the past week.
Last week, the US Department of Energy said it would buy three million barrels of crude oil to replenish the reserves, for delivery in August.
But US oil inventory data released last week dampened expectations of a surge in demand, as it turned out the US had a higher level of reserves than estimated earlier.