Oil Prices Rally On Prospects For Tighter Supply

Oil prices rose sharply on Tuesday as the focus returned to tight supplies and the prospect of increased fuel demand from the United States and China.

Benchmark Brent crude futures jumped 1.6 percent to $115.98 a barrel, while U.S. crude futures traded 2.4 percent higher at $110.55 after having lost more than 9 percent last week.

Both benchmarks posted their first weekly decline since April last week on concerns about slowing global growth and fuel demand destruction.

The United States is in talks with Canada and other allies to further restrict Russia's oil revenues by capping the price it would get for its crude, U.S. Treasury Secretary Janet Yellen said on Monday.

Russia's production is likely to drop following the European Union's agreement to ban most of its oil imports, but demand will remain high due to the post-pandemic recovery.

On the demand side, China is trying to revive its economy through a raft of stimulus measures and eased regulations on the tech sector.

Oil production has been rising in the United States, but refineries are struggling to keep up with higher summer demand.

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