Oil prices buoyed by tight supply bets; Gaza ceasefire in focus

© Reuters.

Investing.com– Oil prices rose slightly in Asian trade on Tuesday as expectations of tighter supplies were boosted by more output curbs in Russia, although the United Nations’ adoption of an Israel-Hamas ceasefire put a lid on gains. 

A tight outlook for crude supplies put oil prices close to four-month highs hit earlier in March. But the prospect of fewer geopolitical disruptions in the Middle East limited any more upside in oil markets.

Brent oil futures expiring in May rose 0.2% to $86.88 a barrel, while West Texas Intermediate crude futures rose 0.2% to $82.13 a barrel by 21:07 ET (01:07 GMT).

Oil prices also benefited from some weakness in the dollar, as the greenback consolidated ahead of more cues on inflation and interest rates later this week. 

UN passes Gaza ceasefire regulation

The UN Security Council on Monday voted in favor of a resolution calling for an immediate ceasefire between Israel and Hamas in the Gaza strip, at least for the holy Muslim month of Ramadan. The U.S. abstained from voting. 

But whether the resolution could result in an actual ceasefire being enforced still remained to be seen. Israel criticized the move. 

The prospect of an Israel-Hamas ceasefire had weighed on oil prices in recent sessions, given that stability in the Middle East presents fewer disruptions in oil production and shipping activity. 

Russia supply disruptions boost oil prices, OPEC+ sees no change in policy

Production cuts in Russia were a key point of support for oil, helping limit any losses in recent sessions after a series of debilitating Ukrainian strikes on key Russian fuel refineries. 

The strikes heralded weaker fuel supplies in the coming months.

Russia also reportedly ordered local oil companies to further cut production in order to comply with lower production targets set by the Organization of Petroleum Exporting Countries and allies (OPEC+) until end-June. 

Other reports showed that OPEC+ members saw no need for further reductions in supply, and that curbs which were in place until end-June were sufficiently tightening global oil markets.