Brent crude futures gained 20 cents, or 0.2%, to $85.66 a barrel at 0128 GMT, while US West Texas Intermediate (WTI) crude futures rose 34 cents, or 0.4%, to $79.21 a barrel, extending gains of around 1% in the prior session.
“Sentiment has shifted amid a positive corporate reporting season. Signs of slowing inflation have also raised expectations that the Fed will be able to suspend rate hikes,” the statement said. ANZ commodities analyst in a note.
Softer rate hike expectations helped push the dollar index lower, supporting oil prices as a weaker greenback makes the commodity cheaper for buyers holding other currencies.
All eyes will be on Wednesday for a meeting of the Organization of the Petroleum Exporting Countries and its allies, including Russia, collectively called OPEC+, where producers are expected to approve their current production targets agreed in November.
OPEC oil production fell in January as Iraqi exports fell and Nigeria’s output failed to recover, with the 10 OPEC members pumping 920,000 barrels per day (bpd) below volumes targeted by the group under the OPEC+ deal, according to a Reuters investigation.
The shortfall was larger than the 780,000 bpd shortfall in December. On a bearish note, data from the American Petroleum Institute industry group showed crude inventories rose about 6.3 million barrels in the week ending Jan. 27, market sources said. .
It was a bigger build than the 400,000 barrels expected on average by analysts polled by Reuters.
Distillate inventories, which include diesel and fuel oil, rose about 1.5 million barrels, contrary to analysts’ expectations of a decline of 1.3 million barrels.