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Brent crude for January delivery rose $1.38, or 1.49%, to $94.19
per barrel at 0951 GMT. The December contract expired on Monday
at $94.83 a barrel, down 1%.
U.S. West Texas Intermediate (WTI) crude rose $1.15, or 1.33%,
to $87.68 a barrel, after falling 1.6% in the previous session.
Oil prices rose as the U.S. dollar sank on Tuesday from a
one-week high against a basket of major peers, as traders
weighed the odds of a less aggressive Federal Reserve at
Wednesday's monetary policy meeting.
A weaker greenback makes dollar-denominated oil cheaper for
buyers holding other currencies, boosting demand for the
commodity.
The Brent and WTI benchmarks both ended October higher, posting
their first monthly gains since May, after the Organization of
the Petroleum Exporting Countries and allies including Russia,
known as OPEC+, said they would cut output by 2 million barrels
per day (bpd).
"OPEC+'s upcoming oil output cuts and the U.S.' record oil
export data also support oil prices fundamentally," CMC Markets
analyst Tina Teng said.
Dwindling oil supply, the possible halt of the Strategic
Petroleum Reserve (SPR) release, and reinvigotated oil demand
growth could also send oil above $100/bbl again, said Tamas
Varga of oil broker PVM.
OPEC raised its forecasts for world oil demand in the medium-and
longer-term on Monday, saying that $12.1 trillion of investment
is needed to meet this demand despite the transition to
renewable energy sources.
These bullish factors have offset demand concerns raised by
COVID-19 curbs in China, the world's top crude oil importer,
which lowered China's factory activity in October and cut into
its imports from Japan and South Korea.
In a further cap to price gains, U.S. oil output climbed to
nearly 12 million bpd in August, the highest since the start of
the COVID-19 pandemic.
U.S. crude oil stocks are likely to rise in the week to Oct. 28,
a preliminary Reuters poll showed.
The poll was conducted ahead of reports from the American
Petroleum Institute due at 4:30 p.m. EDT (2030 GMT) on Tuesday,
and the Energy Information Administration due at 10:30 a.m.
(1430 GMT) on Wednesday.
(Reporting by Rowena Edwards in London, Additional reporting by
Isabel Kua in Singapore; editing by David Evans)
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