By Peter Nurse
Investing.com -- Crude oil prices strengthened Tuesday, rebounding on signs of a global economic recovery even with the market set to received additional supply in the next few months.
By 9:20 AM ET (1420 GMT), U.S. crude futures traded 1.8% higher at $59.70 a barrel, while the international benchmark Brent contract rose 1.6% to $63.14. Both contracts fell around 4% on Monday.
U.S. Gasoline RBOB Futures were up 1.6% at $1.9922 a gallon.
Earlier Tuesday, data showed the recovery in China's services sector picked up speed in March, with the Caixin/Markit services Purchasing Managers' Index rising to 54.3, the highest since December, well above the 50-mark that separates growth from contraction on a monthly basis.
This follows on from Monday’s U.S. equivalent release, which showed U.S. services activity hit a record high, and Friday’s stellar jobs report.
This has helped the market focus move from the agreement last week by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, to bring back 350,000 barrels per day of supply in May, another 350,000 barrels in June and a further 400,000 in July.
Staying with supply issues, indirect talks between the United States and Iran are set to start in Vienna this week to revive the 2015 nuclear deal between Tehran and world powers, potentially leading to the lifting of sanctions on Iran's energy sector.
“While any breakthrough at today’s meeting and the swift removal of U.S. sanctions is unlikely, talks do appear to be moving in the right direction for the eventual lifting of sanctions,” said analysts at ING, in a research note.
“However, we believe that, even with additional supply from OPEC+ along with higher Iranian output, the market will still be drawing down inventories through the year, so should have little impact on the prospect for higher prices later in the year.”
Of additional interest later in the session will be the U.S. crude oil supply data from the American Petroleum Institute for the week ending April 2.
In corporate news, U.K. oil giant BP (NYSE:BP) announced Tuesday it has achieved its $35 billion net-debt target about a year earlier than expected, helped by trading profits and the strong rally in crude prices since November and resilient operations.