Brent crude futures for April, due to expire on Tuesday,
were up by 39 cents to $82.84 per barrel by 0718 GMT. The more active May
contract rose 63 cents to $82.67 per barrel.
Likewise, US West Texas Intermediate (WTI) crude futures
gained 61 cents to $76.29 a barrel.
Brent and WTI futures were both on track, however, for
monthly losses of around 2.2% and 3.8% respectively, with WTI likely to hit a
four-month streak of declines.
Expectations of demand recovery in China underpinned gains,
with the market awaiting key data over the next two days. Economists polled by
Reuters expected factory activity in the world's second-largest economy grew in
February.
"China's economic recovery will drive its demand for
commodities higher with oil positioned to benefit the most," JPMorgan
analysts said in a client note.
JPMorgan's oil analysts maintained their 2023 average price
forecast on Brent crude futures at $90 per barrel.
The threat of more US rate increases following
stronger-than-expected new orders for core US-manufactured capital goods in
January, capped gains though, with US Federal Reserve Governor Philip Jefferson
saying inflation for services remained "stubbornly high".
"The stronger-than-expected inflation numbers raised
concerns about further hikes in interest rates, which has already curbed demand
in the US," ANZ analysts said in a client note.
The market will be looking to the latest US oil stocks data
due from the American Petroleum Institute industry group on Tuesday and the
government's Energy Information Administration on Wednesday for further demand
indicators.
A preliminary Reuters poll showed analysts expect crude
stocks grew by 400,000 barrels in the week to Feb. 24, which would mark the
tenth consecutive week of builds.
Seven analysts polled also estimated that gasoline stocks
rose by about 700,000 barrels. Distillate inventories, which include diesel and
heating oil, were expected to have decreased by about 500,000 barrels last
week.
OANDA analyst Edward Moya said in a note that any signs that
demand is improving would provide a catalyst to send WTI above last week's high
of $77.51.