Oil rose as traders weighed tightening physical supplies against financial markets that have remained under pressure.

Global benchmark Brent rose to settle above US$83 a barrel while West Texas Intermediate climbed near $78, near the upper ends of narrow bands the prices have traded in so far this year. The potential of restrained economic growth due to elevated interest rates has pushed traders away from risk assets, including crude, a commodity often correlated to economic demand.

Still, physical markets continue to show signs of strength amid refined-product shortages. Brent’s prompt spread — the difference between its two nearest contracts — strengthened to 95 cents in backwardation, hovering at three month highs, excluding volatile contract-expiration dates.

Oil has remained in a roughly $10 trading range this year as the push and pull of bearish and bullish factors mute volatility. Attacks on ships in the Red Sea and the Israel-Hamas war have ramped up tensions in the Middle East and added a geopolitical risk premium to prices. Still, concerns about the outlook for China’s economy and its impact on consumption, as well as the pace of non-OPEC supply growth, are limiting gains.

The “oil price s expected to continue to be range-bound short term despite escalating tensions in the Middle East,” said Helge Andre Martinsen, a senior oil analyst at DNB Bank ASA. “Continued strong non-OPEC production data, from Norway and Canada this week, combined with a soft global economic outlook counter the effect of higher Middle East tensions.”

Prices:

• WTI for April delivery rose 87 cents to settle at $77.91 a barrel in New York.
• Brent for April settlement advanced 69 cents to settle at $83.03 a barrel.