08:55 AM EDT, 03/19/2024 (MT Newswires) -- Oil prices edged up early on Tuesday, rising to fresh five-month highs on optimism over Chinese demand amid continuing OPEC+ supply cuts.

West Texas Intermediate crude for April delivery was last seen up US$0.17 to US$82.89 per barrel, the highest since late October, while May Brent crude, the global benchmark, was up US$0.14 to US$82.89 per barrel.

The rise follows on Monday's gains following the release of positive economic data from China, reviving hopes of higher demand from the No.1 importer even as its key real-estate sector struggles amid a debt crisis. The prospect of increased demand comes as OPEC+ continues 2.2-million barrels per day of voluntary supply cuts which will be augmented by further export reductions by Iraq to compensate for overproducing its quota.

Ukrainian drone attacks on Russian refineries are also supporting prices. pushing up diesel and gasoline futures amid estimates that up to 600,000 barrels of Russian processing capacity has been damaged by the attacks.

"Crude oil traded near a near five-month high, supported by OPEC+ production curbs and not least diesel and gasoline strength after Ukrainian drone strikes over the weekend hit three Russian refineries potentially knocking out 600k b/d of Russian oil-refining capacity. Iraq is said to cut its oil exports to compensate for its recent above-quota production," Saxo Bank noted.

The American Petroleum Institute will release its weekly inventories survey later on Tuesday, followed on Wednesday with official data from the Energy Information Administration, with some expecting the reports to show a drawdown on stocks.

"We are forecasting US crude inventories down 7.6 MM BBL for the week ending March 15. This compares to a 1.5 MM BBL draw for the week ending Mar. 8, with the total US crude balance realizing much tighter than we had anticipated, marking a prolonged stretch of tighter-than-expected weekly balances," Macquarie energy strategist Walt Chancellor noted.