Crude oil futures settled higher on Tuesday, recovering well from early losses, amid increasing signs of supply shortage and higher demand for oil.
Oil prices are at multi-year highs with several countries switching to oil from gas amid power shortage. According to Goldman Sachs, switching to oil from gas may add 1 million barrels per day to oil demand.
West Texas Intermediate Crude oil futures for December ended higher by $0.89 or about 1.1% at $84.65 a barrel.
Brent crude futures are up $0.44 or 0.52% at $85.61 a barrel.
According to a Reutuers report, Russia's Deputy Prime Minister Alexander Novak has said Russia expects OPEC+ to raise its output by 400,000 barrels per day at the Nov. 4 meeting, as previously agreed.
Novak, who reportedly said, "Demand (for oil) can decline as there is still uncertainty. We also see there is yet another pandemic wave spreading across the world," added he expects oil demand to reach a pre-pandemic level by the end of next year.
Traders, who are looking ahead to weekly oil reports from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA), are also awaiting the outcome of talks between Iran and Western Powers.
The U.S. has said efforts are at "crucial phase" to revive a 2015 nuclear agreement with Iran.
The API's weekly oil report is due later today, while the EIA is scheduled to release its inventory data Wednesday morning.