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Brent crude futures rose $2.01, or 2.2%, to $94.37 a barrel by
0900 GMT and U.S. West Texas Intermediate (WTI) crude futures
advanced $2, or 2.3%, to $88.61.
Both benchmarks slid 3% to two-week lows in the previous session
and Brent was on course for a weekly drop of nearly 6% while WTI
was set for a fall of about 5% over the week.
The Organization of the Petroleum Exporting Countries (OPEC and
allies, together known as OPEC+, are due to meet on Sept. 5
against a backdrop of expected declines in demand, though top
producer Saudi Arabia says supply remains tight.
"Oil prices are higher today after falling close to their summer
lows over the course of the week. The rebound comes as nuclear
talks between Iran and the U.S. appear to have stalled," said
Craig Erlam, senior market analyst at OANDA.
"A deal has been a big downside risk for oil prices recently;
something Saudi Arabia sought to counter with warnings of
production cuts from the alliance."
OPEC+ this week revised market balances for this year and now
sees demand lagging supply by 400,000 barrels per day (bpd),
against 900,000 bpd forecast previously. The producer group
expects a market deficit of 300,000 bpd in its base case for
2023.
The market is also keeping an eye out for a potential price cap
on Russian oil exports.
G7 finance ministers are expected to firm up plans on Friday to
impose a price cap on Russian oil, aiming to curb revenue for
Moscow's war in Ukraine but keeping crude flowing to avoid price
spikes.
Meanwhile, investors remain worried about the impact of the
latest COVID-19 restrictions in China. The city of Chengdu on
Thursday ordered a lockdown that has hit manufacturers such as
Volvo.
Data showed Chinese factory activity in August contracted for
the first time in three months in the face of weakening deamd
while power shortages and COVID-19 outbreaks also disrupted
output.
(Reporting by Noah BrowningAdditional reporting by Sonali Paul
in Melbourne and Jeslyn Lerh in SingaporeEditing by David
Goodman)
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