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Brent crude futures for April, due to expire on Tuesday, were up
by 87 cents, or 1.1%, to $83.32 per barrel by 1059 GMT. The more
active May contract rose $1.09, or 1.3%, to $83.13 per barrel.
U.S. West Texas Intermediate (WTI) crude futures gained $1.18,
or 1.6%, to $76.89 a barrel.
Expectations of demand recovery in China underpinned gains, with
the market awaiting key data over the next two days. Economists
polled by Reuters expected factory activity in the world's
second-largest economy grew in February.
"China's economic recovery will drive its demand for commodities
higher with oil positioned to benefit the most," JPMorgan
analysts said in a client note.
JPMorgan's oil analysts maintained their 2023 average price
forecast on Brent crude futures at $90 per barrel.
The threat of more U.S. rate increases following
stronger-than-expected new orders for core U.S.-manufactured
capital goods in January, capped gains though, with U.S. Federal
Reserve Governor Philip Jefferson saying inflation for services
remained "stubbornly high".
The "voices of those expecting a 0.5% increase in interest rates
next month by the Federal Reserve are getting louder," PVM Oil
analyst Tamas Varga said.
The market will be looking to the latest U.S. oil stocks data
due from the American Petroleum Institute industry group on
Tuesday and the government's Energy Information Administration
on Wednesday for further demand indicators.
A preliminary Reuters poll showed analysts expect crude stocks
grew by 400,000 barrels in the week to Feb. 24, which would mark
the tenth consecutive week of builds.
Seven analysts polled also estimated that gasoline stocks rose
by about 700,000 barrels. Distillate inventories, which include
diesel and heating oil, were expected to have decreased by about
500,000 barrels last week.
(Additional reporting by Trixie Yap in Singapore; Editing by
Bernadette Baum)
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