Oil prices edge higher on tighter supply, China hopes

Brent crude oil price news: Oil prices edged higher on Tuesday, extending gains from the previous session, as signs of tighter supplies and pledges by Chinese authorities to shore up the world's second-biggest economy lifted sentiment. Brent futures gained 7 cents at $82.81 a barrel at 00:07 GMT, while U.S. West Texas Intermediate (WTI) crude rose 11 cents at $78.85.

Both benchmarks rose over 2 per cent the previous day, and hit their highest closes since April. The crude benchmarks have already climbed for four weeks in a row with supplies expected to tighten due to cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, a group known as OPEC+. In China, the world's second-largest economy and second-biggest oil consumer, leaders pledged to step up policy support for the economy amid a tortuous post-COVID recovery, focusing on boosting domestic demand.

Still, bearish data in the euro zone and U.S. underlined weakness across the global economy. In the euro zone, business activity shrank much more than expected in July as demand in the bloc's dominant services industry declined while factory output fell at the fastest pace since COVID-19 first took hold, a survey showed. In the U.S., business activity slowed to a five-month low in July, dragged down by decelerating service-sector growth, closely watched survey data showed, but falling input prices and slower hiring indicate the Federal Reserve could be making progress on important fronts in its bid to reduce inflation.

Investors have priced in quarter-point hikes from the Fed and European Central Bank (ECB) this week, so the focus will be on what Fed Chair Jerome Powell and ECB President Christine Lagarde say about future rate increases. Later on Tuesday, industry data on U.S. crude inventories is expected. Four analysts polled by Reuters estimated on average that crude inventories fell by about 2 million barrels in the week to July 21.