With the view of U.S. policymakers holding interest rates higher for longer, oil prices increased after dropping about $1 a barrel in the previous session. U.S. West Texas Intermediate crude futures rose 62 cents to $78.88. and Brent crude futures were up 55 cents at $83.34 a barrel by 1239 GMT.

Supporting the dollar and making dollar-denominated oil more expensive for investors holding other currencies, it is anticipated that the U.S. central bank will keep its policy rate on hold for longer. The inflation data from the U.S. this week will further inform the Federal Reserve on interest rate policy.

Regarding supplies, sources told Reuters that Kyiv launched its most recent volley over the weekend with a drone strike that partially shut down the biggest refinery in southern Russia, as part of what has turned into a series of attacks by Russia and Ukraine against each other's vital infrastructure. There have been persistent expectations that the Organisation of the Petroleum Exporting Countries (OPEC) and its partners, referred to as OPEC+, will continue to reduce supplies into the second half of the year.

Iraq?s oil minister indicated that Iraq, the second-largest OPEC producer, is committed to voluntary oil production cuts agreed by the producer group. OPEC+ has previously called out Iraq for pumping more than its output quota in the first three months of 2024. Baghdad agreed to compensate with additional production cuts over the rest of the year. The comments followed the minister's suggestion that the nation had made enough voluntary reductions and would not agree to any additional cuts proposed by the wider OPEC+ group at its June meeting.