Investing.com -- Oil prices rose strongly Tuesday, trading near 10-month highs after OPEC stuck with its forecasts for robust growth in global oil demand amid tight supplies.
By 09:30 ET (13.30 GMT), the U.S. crude futures traded 1.6% higher at $88.67 a barrel, while the Brent contract climbed 1.3% to $91.77.
Both contracts posted strong gains last week, climbing to their highest levels since November last year after Saudi Arabia and Russia announced that they will extend voluntary output cuts until the end of the year, further tightening global supply.
Positive OPEC report helps tone
This positive tone continued Tuesday, helped by the release of the monthly report from the Organization of Petroleum Exporting Countries, with the group of top producers retaining its forecasts for robust growth in global oil demand this year and next even with several economic headwinds.
World oil demand will rise by 2.25 million barrels per day in 2024, compared with growth of 2.44 million barrels per day in 2023, OPEC said in a monthly report, keeping both forecasts unchanged from last month.
"The ongoing global economic growth is forecast to drive oil demand, especially given the recovery in tourism, air travel and steady driving mobility," OPEC said. "Pre-COVID-19 levels of total global oil demand will be surpassed in 2023."
The monthly report by the intergovernmental International Energy Agency is due on Wednesday, and will be studied to see if these views are matched by a group which is not linked to the production side of the equation.
Flooding causes Libya to shut export terminals
Also supporting the market was the news that Libya was forced to shut four of its eastern oil export terminals over the weekend after a deadly storm resulted in widespread flooding.
The floods resulted in the bursting of dams, causing numerous fatalities as buildings were swept away, wiping out as much as a quarter of the eastern city of Derna.
Global economic slowdown overshadowed
These factors have meant that worries over global growth have been overshadowed, even as recent economic data have made for grim reading.
The European Commission cut its forecasts for the eurozone economy on Monday, predicting that Germany, the region’s biggest economy, would slip into recession this year.
Additionally, the U.S. economy will likely slip into a recession in 2024, according to analysts at Citi, citing the historical precedent set by prior eras of high inflation and tight jobs markets.
Data on Wednesday is expected to show that U.S. consumer price index inflation grew at a faster pace in August than July, which could elicit a more hawkish outlook for the Federal Reserve, to the detriment of future economic activity.
Finally, industry data from the American Petroleum Institute on U.S. crude stocks are due late in the session, with inventories expected to have fallen by about 2 million barrels in the week to Sept. 8.
(Ambar Warrick contributed to this item.)