LondonOil prices rose to a four-week high on Wednesday on hopes that major oil producers will extend production cuts when they meet on Sunday and that fuel consumption will start to rise as the summer peak demand period begins.
Brent crude futures were up 19 cents, or 0.2 percent, at $84.41 a barrel as of 1:35 p.m. after hitting $85.02 a barrel, the highest since May 1.
U.S. West Texas Intermediate futures rose 34 cents, or 0.4 percent, to $80.17 after hitting $80.62, the highest since May 1.
Both indexes rose more than 1% on Tuesday.
Traders and analysts expect the OPEC+ group, made up of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, to maintain voluntary production cuts of about 2.2 million barrels per day.
“At the moment we don’t see any appetite to add more oil to the market and drive prices further down,” said Helima Croft, an analyst at RBC Capital.
“Current price levels have already caused several producers to take on additional debt and postpone timelines for high-profile projects.”
Prices are also being supported by the arrival of the Northern Hemisphere summer, when demand for road and aviation fuel peaks.
“Early data suggests that relatively more holiday travel in the US took place over the Memorial Day holiday, which traditionally marks the start of the driving season. Air travel also performed well,” ANZ commodity strategist Daniel Hines said in a note.
Investors were awaiting crude oil inventory data from the American Petroleum Institute later in the day, which was delayed a day because of Memorial Day on Monday.
U.S. crude inventories are expected to have fallen by about 1.9 million barrels last week, according to a preliminary Reuters poll on Tuesday.
Investors are also awaiting the release of the U.S. core personal consumption expenditures (PCE) price index for April on Friday.
An inflation gauge closely watched by the Federal Reserve is expected to stabilize on a monthly basis, faltering expectations of interest rate cuts and potentially impacting oil prices.
Expectations for the timing of rate cuts are fluctuating as policymakers remain wary of persistently high inflation.