Oil prices rose on Tuesday, with Brent crude rising above $40 a barrel, as the IEA increased its oil demand forecast for 2020 and as record supply cuts supported.

Brent crude rose 83 cents, or 2.1%, to trade at $40.54 per barrel. West Texas Intermediate crude gained 72 cents, or 1.9%, to trade at $37.84 per barrel.

In its monthly report on Tuesday, the International Energy Agency (IEA) forecast oil demand at 91.7 million barrels per day in 2020, 500,000 bpd higher than its estimate in May’s report, citing higher than expected consumption during the lockdowns.

Oil supplies in May, the IEA said, plunged by nearly 12 million bpd, with the Organization of the Petroleum Exporting Countries and its allies including Russia - a grouping known as OPEC+ - reducing their output by 9.4 million bpd.

Source : Reuters