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Brent crude futures were up 62 cents, or 0.79%, to $78.61 per
barrel by 1226 GMT, while U.S. West Texas Intermediate (WTI)
crude futures gained 34 cents, or 0.46%, to $73.51.
Prices rose by over $1/bbl earlier in the session but eased
after Chinese leaders reportedly delayed a key economic policy
meeting, amid surging COVID-19 infections.
China had scrapped some of its strict COVID curbs over the past
week, boosting expectations of oil demand growth from the
world's biggest crude importer.
"But now there is some concern of a policy U-Turn," UBS oil
analyst Giovanni Staunovo said.
Investment banks Bank of America and Goldman Sachs said on
Monday a successful economic reopening in China could further
boost oil prices above $90 per barrel.
The market continued to see some support as a timetable to
restart TC Energy Corp's Keystone Pipeline, which ships 620,000
barrels per day (bpd) of Canadian crude to the United States,
remains unclear after a rupture last week.
The closure has raised expectations that U.S. crude inventories
will decline by 3.9 million barrels in the week to Dec. 9,
according to a preliminary Reuters poll.
Reports from the American Petroleum Institute are due at 4.30 pm
ET (2130 GMT) on Tuesday.
Further support followed "the threat of lower Russian output in
response to the G7 price cap" said Craig Erlam, senior market
analyst at OANDA.
Export volumes from Russia's Baltic and Black Sea ports are set
to decline this month.
"Inflation is high, economic growth is stuttering, global
recession is looming, oil consumption is under pressure and
supply is unpredictable at best," Tamas Varga, analyst at PVM
Oil Associates, said.
The market will continue to look for signals from the OPEC
monthly report and the U.S. Consumer Price Index due on Tuesday.
Central bank decisions on interest rates are due from the
Federal Reserve on Wednesday, and the Bank of England and
European Central Bank on Thursday.
(Additional reporting by Muyu Xu in Singapore; editing by Mark
Potter)
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