World (The Times Groupe)- Oil prices rose on Tuesday due to tight supply concerns as Chinese demand is likely to rebound from COVID19 restrictions, while OPEC+ output levels are believed to fall short of demand.
Benchmark Brent crude was trading at $120.37 per barrel at 0651GMT, up 0.71% from the previous session’s close of $119.51.
The American benchmark West Texas Intermediate (WTI) was trading at $119.37 per barrel at the same time, gaining 0.73% after the previous session closed at $118.50 per barrel.
Prices increased mainly due to concerns that current production levels would not be enough to meet increasing demand, especially in China and the US.
Easing COVID19 rules has boosted hopes for an increase in oil demand in China, the world’s second largest oil consumer, while the start of the summer driving season in the US is expected to boost demand.
The OPEC+ ministers decided to add 216,000 barrels of oil a day to the market in July and August, which is lower than the amount the market is estimated to need despite rising demand.
Supply pressure on prices increased as sanctions against Russia’s fossil fuels unfolded and there were uncertainties surrounding tight supply.