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Oil prices settle higher as healthier global growth outlook eases demand concerns

Investing.com -- Oil prices cut losses to settle higher Tuesday as simmering geopolitical tensions kept supply risks elevated at time when a stronger outlook on global growth helped boost crude demand hopes.

By 14:30 ET (19.30 GMT), the U.S. crude futures settled higher at $77.82 a barrel and the Brent contract jumped 0.8% to $82.47 a barrel.

Healthier global growth output boost demand hopes, but China concerns linger

The global growth outlook was given a boost, helping to ease concerns about crude demand.

The International Monetary Fund lifted its forecast for global growth, projecting 3.1% in 2024, up from 2.9%. Still, the cloud of economic weakness hanging over China is expected to continue to fuel demand concerns.

"We see downside risk to our China 2024 oil demand growth forecast of nearly 0.5 million barrels per day on a Q4/Q4 basis," Goldman Sachs said in a recent note,, citing conversations with China consumers and its China oil demand nowcast.

Iranian exports vulnerable as Biden makes decision on U.S. response to drone attack

The ongoing tensions in the Middle East were ratcheted up a notch after U.S. President Joe Biden said he has made a decision about how to respond to the deadly drone attack in Jordan.

The Biden administration has accused Iran of backing the militants who committed the attack, while Tehran has denied involvement in the attack.

Fed meeting in focus

In the U.S., the world’s largest consumer of crude, traders are keeping an eye on the latest two-day policy-setting by the Federal Reserve, which starts later in the session.

The Fed is widely expected to keep interest rates unchanged on Wednesday, but traders will be looking for clues as to when Fed officials think rate cuts are in order, as high interest rates weigh on economic activity.

On the supply side, the American Petroleum Institute is scheduled to provide its estimate of U.S. crude stockpiles later in the session, after last week’s hefty 6.7 million barrel decline following weather-related supply disruptions, with production in North Dakota, hit hard.

The Organisation of Petroleum Exporting Countries, and allies, known as OPEC+, is due to meet later this week, but a change of the group's oil policy for April is unlikely at this point.

(Peter Nurse contributed to this story)

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