LONDON, June 10 (Reuters): Oil prices rose on Monday, buoyed by hopes of rising fuel demand this summer, though gains were capped by a strengthening of the dollar on receding expectations of imminent cuts to US interest rates.
Goldman Sachs analysts expect Brent to rise to $86 a barrel in third quarter, saying in a report that solid summer transport demand will push the oil market into a third-quarter deficit of 1.3 million barrels per day (bpd).
Brent crude futures gained 53 cents, or 0.7 per cent, to $80.15 a barrel by 1320 GMT. US West Texas Intermediate crude futures were up 57 cents or 0.8 per cent at $76.10.
"The increase in prices started as the US wakes up and kicks off the new week. Investors on the other side of the Atlantic clearly dismiss the Euro weakness and the resultant dollar strength due to French snap elections," said Tamas Varga of oil broker PVM.
"There is a growing conviction that demand will be buoyant as the summer driving season approaches leading to considerable stock draws".
Oil last week posted a third straight weekly loss on concerns that a plan to unwind some production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, from October will add to rising supply.
Despite the OPEC+ cuts, oil inventories have risen. US crude stocks rose in the latest week, as did gasoline stocks. Energy consultancy FGE also expects oil to rally, with prices reaching the mid-$80s into the third quarter.
"We continue to expect the market to firm up," FGE said. "But it will likely need a convincing signal of tightening from preliminary inventory data."
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