Oil prices increased on Tuesday as increased seasonal demand projections, supply cuts of OPEC+ group and the US plans to purchase oil for its strategic oil reserves fuel optimistic sentiment.
International benchmark Brent crude traded at $76.33 per barrel at 09.24 a.m. local time (0624 GMT), a 0.44% rise from the closing price of $75.99 a barrel in the previous trading session on Friday.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $72.39 per barrel, up 0.47% from the previous session's close of $72.05 per barrel.
The rise in the prices is mainly driven by investors' expectations of a seasonal increase in oil demand and the supply cuts of the OPEC+ group.
The Memorial Day holiday on May 29 traditionally considered as the beginning of the summer driving season fueling demand in the country.
The OPEC+ group's decision to cut 1.2 million barrels per day started at the beginning of May is also raising concerns about weakening oil supply in the second half of the year.
In addition, the US's announcement last week that it will purchase up to 3 million barrels of crude oil for its strategic oil reserves to be delivered in August continues to be a factor supporting the upward trend in prices.
Analysts expect that with the full implementation of the OPEC+ production cuts and further increase in demand in the summer season, there will be an oil supply deficit from June. Asian countries is projected to lead most of the growth in oil demand with consumption increase of about 2 million barrels per day in the second half of the year.
On the other hand, the ongoing concerns about the debt limit crisis in the US are limiting the upward movement of prices.
Also, US Federal Reserve Bank of St. Louis President James Bullard said that the Fed may have to increase the policy rate by 50 basis points this year.
By Ebru Sengul Cevrioglu