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Brent crude was 25 cents, or 0.3%, higher at $87.25 a barrel by
0830 GMT after rising 2.4% last week. U.S. West Texas
Intermediate crude was at $83.44 a barrel, up 27 cents, or 0.3%,
following a 3.2% gain last week.
Trading volumes were thin as markets in several countries
remained closed for the Easter holidays.
Both benchmarks posted a third consecutive month of gains in
March, with Brent holding above $85 a barrel since the middle of
last month.
The Organization of the Petroleum Exporting Countries (OPEC) and
its allies, a group known as OPEC+, has pledged to extend
production cuts to the end of June which could tighten crude
supply during summer in the Northern Hemisphere.
Russian Deputy Prime Minister Alexander Novak said on Friday
that the country's oil companies will focus on reducing output
rather than exports in the second quarter in order to evenly
spread production cuts with other OPEC+ members.
Drone attacks from Ukraine have knocked out several Russian
refineries, which is expected to reduce Russia's fuel exports.
"Geopolitical risks to crude and heavy feedstock supplies add to
strong (second-quarter) demand fundamentals," Energy Aspects
analysts said in a note.
Almost 1 million barrels per day (bpd) of Russian crude
processing capacity is offline from the attacks, impacting its
high-sulphur fuel oil exports which are processed at Chinese and
Indian refineries, the consultancy added.
In Europe, oil demand was firmer than expected, rising 100,000
bpd on the year in February, Goldman Sachs analysts said, versus
its forecast of a 200,000 bpd contraction in 2024.
Firm European demand and softness in U.S. supply growth coupled
with a possible extension of OPEC+ cuts through 2024 outweigh
downside risk from persistent softness in China's demand, they
said in a note.
Still, China's manufacturing activity expanded for the first
time in six months in March, an official factory survey showed
on Sunday, supporting oil demand in the world's largest crude
importer, even as a crisis in the property sector continues to
drag on the economy.
(Additional reporting by Florence Tan and Sudarshan Varadhan;
Editing by Christian Schmollinger, Kirsten Donovan)
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