Oil prices rose about 1 percent on Tuesday as the market shifted focus to the possibility of increased Chinese demand, drawing attention away from trade tensions between that country and the United States after a series of tariffs imposed by both countries.
Brent crude was up 76 cents at $73.82 a barrel by 12:27 p.m. EDT (1627 GMT). US West Texas Intermediate (WTI) was up 95 cents at $68.84. Earlier in the session, WTI reached a high of $69.05.
Reports that China will increase infrastructure spending helped lessen fears that US-China trade tensions will reduce the country's demand for oil, said Phil Flynn, analyst at Price Futures Group in Chicago.
"That's going to be very bullish for oil demand," Flynn said. "Infrastructure spending from China in the past had really jacked up oil demand, and I think that's adding some outside support for prices."
In addition, after an 8 percent decline from multi-year highs, buyers were coming back into the market, said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
With notable reductions in crude inventories because of strong global demand growth, the supply-and-demand picture will remain strong unless there are significant production increases from Russia and Saudi Arabia, McGillian said.
Both benchmarks have fallen this month as crude supplies from Russia, Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries have increased and some unscheduled production losses have eased.
Market sentiment has been driven by fears that supply could be disrupted by confrontation in the Middle East or that Washington's trade dispute with major trading partners could dampen global growth.
Iran, OPEC's third-largest producer, which pumps 3.75 million barrels per day, has come under increasing US pressure, with the administration of President Donald Trump pushing countries to cut all imports of Iranian oil beginning in November.
Saudi Arabia and other large producers are ramping up output to offset losses likely to come as the November deadline approaches.
Meanwhile, US crude inventories at the US crude futures delivery hub at Cushing, Oklahoma rose in the four days to Friday, according to data supplier Genscape, traders said.
Stockpiles at the hub were expected to fall for the 10th consecutive week, traders said.
A Reuters survey on Monday estimated on average that total US crude stocks fell 3.2 million barrels last week.
US industry group the American Petroleum Institute will release inventory data for last week at 4:30 p.m. EDT (2030 GMT) on Tuesday. Official US Energy Department data will follow on Wednesday.
First Published: IST