09:14 AM EDT, 07/02/2024 (MT Newswires) -- Oil traded at the highest in 10 weeks early on Tuesday on expectations for high summer demand, continuing violence in the Middle East and an early start to the hurricane season.

West Texas Intermediate crude oil for August delivery was last seen up US$0.91 to US$84.29 per barrel, the highest since April 16, while September Brent crude, the global benchmark, was up US$0.78 to US$87.38.

The rise comes on expectations summer demand is surging, with forecasts calling for a big drop in U.S. oil inventories in reports coming on Tuesday afternoon from the American Petroleum Institute and a day later from the Energy Information Administration.

"We are forecasting US crude inventories down 10.9 MM BBL (million barrels) for the week ending June 28," Macquarie Group energy strategist Walt Chancellor said. "This compares to a 3.6 MM BBL build for the week ending June 21, with the total US crude balance realizing modestly tighter than we had anticipated last week ... Likewise, we anticipate across-the-board draws in products this week, led by distillate (-2.3 MM BBL) and gasoline (-1.2 MM BBL), with jet stocks also lower (-0.3 MM BBL). We model implied demand for these three products at ~14.8 MBD for the week ending June 28."

Mideast tensions continue to run hot, with Israel pressing its war on Hamas in Gaza, while threatening to expand hostilities into Lebanon as conflicts between Israeli forces and the Iran-backed Hezbollah militia heat up and Houthi militants continue attacks on Red Sea shipping.

"Due to the increasing number of Palestinian deaths, Israel is ever more isolated but determined and Hamas and Hezbollah will not put their weapons down," PVM Oil Associates noted. "Yet, what we learnt in the last six months was that neither Iran nor Saudi Arabia advocate escalation, thus oil supply from the regions has not been affected."

The rise also comes as Hurricane Beryl strengthened to a category five storm packing winds of 165-miles per hour, according to the National Hurricane Center. Beryl is the most powerful storm to ever rise in June, spurred by high ocean temperatures, but it is not expected to disrupt production from platforms in the northern gulf.