Oil rises on higher demand forecasts, tight supplies | Reuters

Oil rises on higher demand forecasts, tight supplies | Reuters

Oil prices rose to a two-week high on Tuesday after the United States lifted travel restrictions and other signs of a global post-pandemic recovery boosted the demand outlook, while supply remained tight.

Prices rallied after the U.S. Energy Information Administration (EIA) in its Short Term Energy Outlook (STEO) on Tuesday projected retail gasoline prices would decline over the next several months.

U.S. President Joe Biden's administration said it would use price forecasts in the STEO report to determine whether to release oil from the nation's Strategic Petroleum Reserve (SPR). read more

Analysts said if the STEO had shown a huge rise in projected gasoline prices, the Biden administration was likely to release lots of oil from the SPR quickly, which would have depressed prices.

Brent futures rose $1.35, or 1.6%, to settle at $84.78 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $2.22, or 2.7%, to settle at $84.15.

They were the highest closes for both benchmarks since Oct. 26.