Oil gains on expectations for higher demand and as Middle East concerns rise

Oil prices rose on Tuesday, underpinned by signs that demand may improve China and the U.S., the world’s biggest oil consuming nations, and growing concerns of a widening conflict in the Middle East that could affect supply from region, Reuters reported.

Brent futures for June delivery rose 58 cents to $88 a barrel by 0641 GMT. U.S. West Texas Intermediate (WTI) crude futures for May rose 58 cents to $84.29 a barrel, after reaching the highest close for a front month contract since Oct. 27 in the previous session.

Manufacturing activity in March in China expanded for the first time in six months and in the U.S. for the first time in 1-1/2 years, which should translate to rising oil demand this year. China is the world’s largest crude importer and second-largest consumer while the U.S. is the biggest consumer.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, will hold an online meeting of its Joint Ministerial Monitoring Committee on Wednesday to review the market and members’ implementation of output cuts. Members are expected to uphold their current supply policy, which calls for voluntary output cuts of 2.2 million barrels per day (bpd) until the end of the second quarter.

OPEC’s output fell last month by 50,000 bpd, indicating the voluntary cuts are having some effect.