Oil prices bounced back as equity markets staged a recovery on Tuesday, though concerns persist over economic headwinds from tariffs and U.S. monetary policy that could dampen fuel demand.

Brent crude futures rose 59 cents, or 0.9%, to $66.85 a barrel by 1423 GMT. The U.S. West Texas Intermediate crude contract for May, which expires on Tuesday, was up 67 cents, or 1%, at $63.75.

The more actively traded WTI June contract gained 70 cents, or 1.1%, to $63.11.

"The daily fluctuations in Brent crude oil prices have been quite well aligned with fluctuations in equity prices," said SEB analyst Bjarne Schieldrop.

U.S. stock index futures rose on Tuesday, bouncing back after losses in the previous session when President Donald Trump repeated his criticism of Federal Reserve Chair Jerome Powell and said the U.S. economy could slow unless interest rates were lowered immediately.

Brent and WTI benchmarks had dropped more than 2% on Monday's equities sell-off and as signs of progress in nuclear deal talks between the U.S. and Iran helped to ease supply concerns.

Trump's comments about Powell fuelled fears for the Fed's independence in setting monetary policy and the outlook for U.S. assets. Major U.S. stock indexes dropped and the dollar index slid to a three-year low on Monday.

"The price drop on Monday looked a bit excessive in my view, considering that oil demand remains solid, so we might have some reversal today," said UBS analyst Giovanni Staunovo.

Progress in talks between the U.S. and Iran, which on Saturday agreed to begin drawing up a framework for a potential nuclear deal, could also result in Trump backing off from efforts to choke off the Middle East country's oil exports.

Meanwhile, Russia's economy ministry has cut its forecast for the average price of Brent crude in 2025 by nearly 17% from its projection in September, according to documents seen by Reuters.

U.S. crude oil and gasoline stockpiles were expected to have fallen last week, while distillate inventories are likely to have risen, a preliminary Reuters poll showed on Monday, ahead of weekly reports from the American Petroleum Institute and the Energy Information Administration.

Source: Investing.com