Oil edged higher as it drew support from a firmer tone across wider markets.

Brent traded above US$85 a barrel, clawing back some of Friday’s decline. Global stocks rose ahead of a week of political risks and inflation data, while the U.S. dollar fell making commodities priced in the currency more appealing.

Crude remains on track for a monthly gain, and there are signs of rising gasoline demand in the U.S. and healthy air travel volumes, which is aiding the outlook. The prompt spread for Brent has strengthened this month in a bullish backwardation structure, signaling tightening supply.

“We remain supportive toward the oil market with a deficit over the third quarter set to tighten the oil balance,” said Warren Patterson, Singapore-based head of commodities strategy at ING Groep NV. “Speculators have also become more constructive toward oil as we move into summer.”

In Iran, snap elections will be held on Friday following the death of Ebrahim Raisi in a helicopter crash last month. The vote comes at a time of heightened tensions between Iran and the West, with Tehran mobilizing a regional network of proxy militias to target Israel.

Prices:

• Brent for August settlement added 0.5% to $85.61 a barrel at 10:42 a.m. in London
• WTI for August delivery climbed to $81.09 a barrel