Brent crude oil futures stuck near three-year highs on Tuesday, with U.S. benchmark crude close to 2014 peaks, after the OPEC+ supplier group decided to stick to a gradual output increase plan rather than fully opening the taps.
Brent crude was up 51 cents or 0.6 percent at $81.77 a barrel earlier, having risen 2.5 percent on Monday. U.S. West Texas Intermediate (WTI) oil rose 50 cents or 0.6 percent to $80.98, after gaining 2.3 percent the previous session.
Oil prices have already surged more than 50 percent this year, a rise that has added to inflationary pressures that crude-consuming nations such as the United States and India are concerned will derail recovery from the pandemic.
Despite the pressure to ramp up output, OPEC+ was concerned that a fourth global wave of COVID-19 infections could hit the demand recovery, a source told Reuters a little before the vote.
Russian Deputy Prime Minister Alexander Novak said after the talks he believed the market is now balanced.
"But prices are only seen uncomfortably high until the first cold spell arrives in the northern hemisphere creating additional demand and triggering a fresh bout of buying," PVM analysts said.
Meanwhile U.S. crude oil and distillate inventories are likely to have fallen last week, according to a preliminary Reuters poll.
Five analysts surveyed by Reuters estimated on average that crude inventories declined by about 300,000 barrels in the week to Oct. 1.