Global oil prices stabilized on Tuesday, driven by the expectation that OPEC+ will maintain its supply cuts during the upcoming June 2 meeting, coupled with hopes for robust U.S. summer fuel demand. These factors helped offset concerns about prolonged high U.S. interest rates.

On Monday, oil prices increased by over 1% in light trading due to public holidays in Britain and the United States. The start of the U.S. summer driving and vacation season supported expectations of strong fuel demand.

By 0810 GMT, the July contract for Brent crude, the global benchmark, had risen by 17 cents, or 0.2%, to $83.27 a barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude was priced at $78.79, up $1.07, or 1.4%, from Friday’s close. This increase occurred despite trading through the U.S. Memorial Day holiday without a settlement.

“Despite the noticeably brighter mood over the past two days, concerns about interest rates will likely act as a brake on significant further increases in oil prices in the near term,” said Tamas Varga of broker PVM. He added that it is reasonable to assume there will be no changes in production levels following the OPEC+ meeting.

Last week, worries about U.S. interest rates remaining high for an extended period contributed to a weekly loss in crude prices. Higher interest rates raise borrowing costs, which can suppress economic activity and reduce oil demand.

Nevertheless, UBS analyst Giovanni Staunovo noted in a client report that, despite general concerns about high interest rates potentially leading to weaker oil demand growth, “real-time mobility data indicates oil demand growth is still broadly healthy.”

In the air travel sector, data from flight analytics firm OAG showed that U.S. domestic flight seat numbers for May increased by 5% month-on-month and nearly 6% year-on-year to just over 90 million, surpassing 2019 levels.

The upcoming OPEC+ online meeting on Sunday is expected to see traders and analysts anticipate the continuation of 2.2 million barrels per day in voluntary production cuts, which could further support oil prices.

“We expect oil prices to move higher in the coming days,” said Satoru Yoshida, a commodity analyst with Rakuten Securities, citing anticipated continued voluntary output cuts by producers. Yoshida also noted that the start of the U.S. driving season would provide additional support.