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Brent crude futures rose 70 cents, or 0.81%, to $87.30 a barrel
by 1035 GMT, their highest since April 30. U.S. West Texas
Intermediate (WTI) crude was up 68 cents, or 0.82%, at $84.06
after touching its highest since April 26.
Both benchmarks gained about 2% in the previous session.
U.S. gasoline demand is expected to ramp up as the summer travel
season picks up with the Independence Day holiday this week. The
American Automobile Association has forecast that travel during
the holiday period will be 5.2% higher than in 2023, with car
travel up 4.8%.
Also supporting oil prices is a rising risk premium linked to
Middle East tensions and signs of subsiding inflation in the
United States, rekindling hopes of interest rate cuts.
Markets are also watching for possible disruption to U.S.
refining and offshore production after Hurricane Beryl struck
the Caribbean as a category 4 storm on Monday.
"A dangerous hurricane in the Caribbean Sea is expected to hit
Mexico, intensifying concerns regarding the supply side of the
equation," said Charalampos Pissouros, senior investment analyst
at brokerage XM, adding that recent U.S. data supports the
market view that the Federal Reserve is likely to proceed with
two quarter-point cuts to interest rates this year.
Lower crude exports from OPEC and Russia, just as refinery runs
ramp up for the summer peak, are contributing to a tighter than
expected market and prices are reacting accordingly, said
Claudio Galimberti at research company Rystad Energy.
A still-high geopolitical risk premium also adds oil price
support, Galimberti added, though signs of lower than expected
demand growth have limited gains.
Some data shows that first-half crude imports to Asia, the
world's biggest oil-consuming region, were lower than in the
same period last year.
(Reporting by Arunima Kumar in Bengaluru, Mohi Narayan in New
Delhi and Colleen Howe in BeijingEditing by David Goodman)
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