Oil rises on signs of strong demand, investors await OPEC+ output decision

Oil prices edged higher on Tuesday as investors took stock of positive demand indicators, while also treading cautiously ahead of an OPEC+ meeting to decide the group's August output policy.

Brent crude was up 18 cents, or 0.3%, to $66.92 a barrel at 11:36 a.m. ET (1536 GMT), while U.S. West Texas Intermediate crude was up 27 cents, or around 0.4%, to $65.38 a barrel.

The gains were likely due to supportive data from a private-sector survey in China, which showed factory activity returned to expansion in June, said Randall Rothenberg, risk intelligence expert at U.S. oil brokerage Liquidity Energy.

Expectations that Saudi Arabia will raise its August crude oil prices for buyers in Asia to a four-month high, and firm premiums for Russian ESPO Blend crude oil, were also supporting the notion of robust demand, Rothenberg said.

Meanwhile, oil's gains were kept in check by expectations that the OPEC+ group will raise its August crude oil output by an amount similar to the outsized hikes agreed in May, June, and July. Four OPEC+ sources told Reuters last week that the group plans to raise output by 411,000 bpd next month when it meets on July 6.

"All eyes will be on OPEC+'s decision over the weekend, when the group is expected to add another 411,000 bpd of production in an effort to gain more market share, primarily over the US shale producers," StoneX energy analyst Alex Hodes wrote to clients.