Oil is rising with hopes of higher Chinese demand

Oil prices rose and were on track for a third day of gains on Tuesday, supported by investor optimism that holiday travel in China will boost fuel demand and expectations of lower US crude inventories.

Overseas flight bookings in China during the upcoming Labor Day holiday indicate a continued recovery in travel to Asian countries. US crude inventories are expected to decline by 1.7 million barrels in the weekly supply reports.

Brent crude futures rose 10 cents to $82.83 a barrel by 0805 GMT, while US West Texas Intermediate crude rose 15 cents to $78.91 a barrel. Both crude futures rose more than 1 percent on Monday.

Voluntary and involuntary supply cuts also helped support oil’s rally. And there were some tangible signs of an imminent resumption of oil exports in northern Iraq after stopping for a month. Members of the OPEC+ oil-producing group are due to start voluntary cuts in May.

But investors remain concerned about the possibility that central banks in the United States, Britain and the European Union will raise interest rates to curb inflation, which could slow economic growth and hurt energy demand.

The Federal Reserve, the Bank of England and the European Central Bank are expected to raise interest rates at their monetary policy committee meetings during the first week of May.

On Tuesday, investors are looking forward to the oil industry’s data on US inventories. Analysts, in a Reuters poll, expected the data to show a decline in US crude inventories by about 1.7 million barrels in the week ending April 21.

US government data on crude inventories is due on Wednesday.