Oil rises on supply worries, U.S. summer demand hopes

Oil prices edged higher on Tuesday, spurred by worries about political instability in Russia and possible supply disruptions, as well as U.S. demand hopes ahead of the summer driving season, Reuters reported.

By 0041 GMT, Brent crude futures had climbed 37 cents to $74.55 a barrel, while U.S. West Texas Intermediate (WTI) futures rose 42 cents to $69.79 a barrel. On Monday, Brent had climbed 0.5% and the WTI 0.3%.

A clash between Moscow and Russian mercenary group Wagner was averted on Saturday after the heavily armed mercenaries withdrew from the southern city of Rostov under a deal that halted their rapid advance on the capital.

Following the weekend’s events, ANZ analysts said, the complacency among traders about Russian oil continuing to seep into the international market could no longer be assumed to the same extent.

“This is likely to lead to a risk premium being applied to the oil price amid the risk of further civil unrest,” they added in a note.

Fragile market sentiment was likely to cap any price upside, however, they warned.

Oil fell about 3.6% last week on worries that further interest rate hikes by the U.S. Federal Reserve could sap demand as China’s economic recovery disappoints investors.

Traders were also watching for signs of a pickup in demand for transport fuels, such as gasoline, in the United States ahead of the peak summer driving season.

Global gasoline demand grew by 365,000 bpd year on year, driven by strong U.S. gasoline data, with consumption at an eight-week high of 9.4 million bpd in the week of June 17, JP Morgan analysts said in a note.

Official U.S. oil inventory data from the American Petroleum Institute industry group is to be released on Tuesday, followed by the Energy Information Administration the next day.