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Brent crude futures were up 41 cents, or 0.4%, at $102.73 a
barrel at 1117 GMT, while U.S. West Texas Intermediate contracts
were up 18 cents, or 0.2%, at $98.72 per barrel.
Both contracts had settled down around 4% on Monday.
Demand concerns in China, the world's largest crude oil
importer, added downward pressure on Tuesday. China's capital
Beijing has expanded its COVID-19 mass testing to much of the
city of nearly 22 million, as the population braced for an
imminent lockdown similar to Shanghai's stringent curbs.
But both oil contracts rose over $1 a barrel earlier in the
session following a statement from the People's Bank of China
that it will step up monetary policy support to the real
economy.
"I still expect more policy support, but not the flood-like
policy deluge the markets have been hoping for, which could
leave oil markets adrift over the short term, looking to the
U.S. summer driving season and EU sanctions for support,"
Stephen Innes of SPI Asset Management said in a note.
The prospect of supply tightness in the physical market related
to the phasing out of Russian oil provided price support.
The parliamentary parties of Germany's ruling coalition have
called on the government to push ahead with a plan to phase out
Russian oil and gas imports "as soon as possible".
But analysts said the release of oil from emergency reserves had
eased concerns over tight supply.
"Focus has shifted towards the demand side of the equation and
worries about prolonged supply disruptions have greatly been
mitigated by the release of 240 million bbls of SPR oil by IEA
members and by the ostensible, albeit somewhat obscured, dealing
in Russian oil," said Tamas Varga of oil broker PVM.
Separately, in a bearish signal for oil markets, five analysts
polled by Reuters estimated on average that U.S. crude
inventories had increased by 2.2 million barrels in the week to
April 22.
The poll was conducted ahead of the release of the inventory
report from the American Petroleum Institute at 4:30 p.m. EDT
(2030 GMT) on Tuesday. The official government Energy
Information Administration data is due out on Wednesday.
(Additional reporting by Mohi Narayan in New Delhi and Liz
Hampton in Denver; Editing by Louise Heavens and Bernadette
Baum)
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