Oil Inches Up, Weighing OPEC+ Supply Cuts Against Rate Hike Fears

Oil prices edged higher on Tuesday as market participants weighed supply cuts from OPEC+ that would tighten the global market against concerns about further interest rate hikes potentially hurting demand.

Investors were awaiting a slate of reports on inflation, oil demand and supply due this week that could give the market direction.

Brent crude rose 8 cents at $84.26 a barrel by 0004 GMT, while U.S. West Texas Intermediate gained 11 cents to $79.85 a barrel.

Oil prices fell on Monday after rising for three straight weeks, after U.S. jobs data pointed to a tight labor market, heightening expectations of another Federal Reserve rate hike that could curb oil demand.

Rate hike expectations boosted the U.S. dollar index on Monday and Tuesday, which weighed on oil prices as dollar strength makes oil more expensive for other currency holders.

Oil futures have climbed more than 5% since the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia surprised the market last week with a new round of production cuts starting in May.

In U.S. supply, industry data on U.S. crude stockpiles is due Tuesday. Five analysts polled by Reuters estimated on average that crude inventories fell by about 1.3 million barrels in the week to April 7.

Further, a U.S. inflation report to be released on Wednesday could help investors gauge the near-term trajectory for interest rates.

Also coming up are monthly reports from OPEC on Thursday and the International Energy Agency on Friday, which will update oil demand and supply forecasts.