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Brent crude futures rose 28 cents, or 0.31%, to $90.66 a barrel
by 1002 GMT. U.S. West Texas Intermediate (WTI) crude futures
were up 24 cents or 0.28% at $86.67.
On Monday a fresh round of Israel-Hamas ceasefire discussions in
Cairo had ended a multi-session rally, leading Brent to its
first decline in five sessions and WTI to its first in seven on
prospects for a breakthrough.
However, Israeli Prime Minister Benjamin Netanyahu saying on
Monday that a date had been set for Israel's invasion of the
Rafah enclave in Gaza ended hopes that tensions in the region
might be easing, said IG analyst Tony Sycamore in a note.
The continuation of the conflict keeps alive the risk that other
countries could be drawn in, especially Iran which is a major
Hamas backer and the third-largest producer in the Organization
of the Petroleum Exporting Countries (OPEC).
Adding to concerns of a tight market, Mexico's state oil company
Pemex said it would reduce crude exports by 330,000 barrels per
day so it can supply more to domestic refineries, cutting the
supply available to the company's U.S., European and Asian
buyers by one-third.
Pemex had already cut its April exports by 436,000 bpd.
Investors are also awaiting inflation data due from the U.S. and
China for further signals on the economic direction of the
world's top two oil consumers, as well as an interest rate
decision from the European Central Bank on Thursday.
"The fate of interest rates and if there can be a reduction in
2024 is at stake and the rally in oil is making it harder for
anyone believing that inflation is under control," said PVM
analyst John Evans.
(Reporting by Robert Harvey in London, Colleen Howe and Andrew
Hayley in Beijing; editing by Jason Neely)
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