Crude oil prices rose sharply on Tuesday with traders weighing the prospects of the Organization of the Petroleum Exporting Countries and allies cutting output to support prices in the event of Iranian crude entering the market.
West Texas Intermediate Crude oil futures for September ended higher by $3.38 or about 3.7% at $93.74 a barrel.
Brent crude futures gained nearly 4% to $100.22 a barrel.
Saudi Arabia has warned that OPEC could cut output to correct the recent oil price fall. Saudi's oil minister Prince Abdulaziz bin Salman said late Monday that the Organization of the Petroleum Exporting Countries stands ready to reduce production as future prices don't reflect the underlying fundamentals of supply and demand.
"The paper and physical markets have become increasingly more disconnected," he said in response to written questions from Bloomberg News.
"Witnessing this recent harmful volatility disturb the basic functions of the market and undermine the stability of oil markets will only strengthen our resolve," he said.
Markets also looked ahead to weekly inventory data from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API data is due later in the day, while EIA's inventory report is due Wednesday morning.
