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OPEC supply additions are running below their allowed increase
under a pact with allies due to a lack of capacity in some
countries. [OPEC/O] Major economies have avoided a return to
severe lockdowns, even as coronavirus cases soar.
Brent crude gained $1.14, or 1.4%, to $82.01 a barrel at 1134
GMT, after dropping 1% in the previous session. U.S. West Texas
Intermediate (WTI) rose $1.16, or 1.5%, to $79.39, after falling
0.8% on Monday.
"Omicron has yet to wreak the havoc of the delta variant and may
never do so, keeping the global recovery on track," said Jeffrey
Halley, analyst at brokerage OANDA.
Brent rose 50% in 2021 and has rallied further in 2022 as
investors see demand rising while OPEC and its allies, known as
OPEC+, slowly ease record output cuts made in 2020.
Outages in Libya have also supported prices and while production
has risen, the National Oil Corp. said on Tuesday it was
suspending exports from the Es Sider terminal.
"The higher oil production in the country has not yet translated
directly into an increase in available oil supply," said Carsten
Fritsch of Commerzbank. "This may explain why oil prices have
not responded as yet to the reopening of the Libyan oilfields."
A weaker U.S. dollar also helped support oil as it makes oil
cheaper for those holding other currencies and tends to reflect
higher investor risk appetite.
In what would be a further indication of tight supply, the
latest reports on U.S. inventories are expected to show crude
stockpiles fell by about 2 million barrels. [API/S]
The first of this week's supply reports, from the American
Petroleum Institute (API), is due at 2130 GMT.
(Additional reporting by Sonali Paul in Melbourne and Koustav
Samanta in Singapore; editing by David Evans and Jason Neely)
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