Oil rose on Tuesday as renewed concerns over tight supply dominated market sentiment after Saudi Arabia warned that the major oil producer could cut output to correct a recent oil price decline.
Brent crude gained 42 cents, or 0.4%, to $96.90 a barrel by 0630 GMT, after a choppy session on Monday when they dropped by more than $4 before paring losses to trade near flat. It advanced by $1 a barrel in early Asia trading hours.
U.S. West Texas Intermediate crude futures rose 40 cents, or 0.4%, to $90.76 a barrel.
The benchmarks are down about 12% and 8% this month, respectively, amid fears about a global recession and fuel demand.
Saudi state news agency SPA cited Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman as telling Bloomberg that OPEC+ has the means and flexibility to deal with challenges.
With Saudi Arabia standing out to defend prices, the market is likely to take the chance to build long positions, said analysts from Haitong Futures, adding that the outcome of the Iranian nuclear deal remains a big uncertainty.
The current tight demand-supply is underscored by U.S. crude inventory in the Strategic Petroleum Reserve (SPR) at its lowest level in more than 35 years, Yeap Jun Rong, market strategist from IG Group, said in a note.
On U.S. supply, market participants are awaiting industry data due at 4:30 p.m. ET on Tuesday. U.S. crude oil and gasoline stockpiles likely dropped last week, while distillate inventories edged up, a preliminary Reuters poll showed on Monday.
