Ammon News - Oil prices edged up in Asia on Tuesday, extending gains from the previous session, buoyed by expectations of strong fuel demand from the U.S. during the summer, and ahead of an output policy decision from OPEC+ at a June 2 meeting.

July Brent crude rose 6 cents to $83.16 a barrel by 0608 GMT. The more-active August futures rose 5 cents to $82.93.

U.S. West Texas Intermediate (WTI) crude futures for July were at $78.80 a barrel, up $1.08, or 1.39%, from Friday's close, having traded through a U.S. holiday to mark Memorial Day without a settlement.

Oil prices rose over 1% on Monday in muted trade owing to public holidays in Britain and the United States after a downbeat week characterised by the outlook for higher-for-longer U.S. interest rates in the face of sticky inflation.

Expectations of strong fuel demand with the start of the U.S. summer driving and vacation season provided price support, some analysts said.

Earlier, three sources from OPEC+ countries said an extension of voluntary output cuts of 2.2 million barrels per day into the second half of the year was likely.

Lending further support to prices was bullish demand expectations from China after Beijing set up its third planned state-backed investment fund to boost its semiconductor industry.

"Another positive driver for oil is an indirect external demand loop from China as more stimulus measures are being announced to support the local semiconductor industry by setting up a $47.5 billion chip fund (Big Fund III), the highest funded amount versus the previous two phases as part of the National Integrated Circuit Industry Investment Fund," said OANDA senior market analyst Kelvin Wong.

Reuters