holiday.

Futures closed just 0.3 percent higher after surging past $75 a barrel earlier in the session. Oil has been buffeted lately as U.S. President Donald Trump -- facing high retail gasoline prices ahead of midterm elections -- pushes Saudi Arabia to boost output. Plus, a report today from data-provider Genscape Inc. was said to show Texas Gulf Coast crude stockpiles rose by about 431,000 barrels last week.

The quick drop after WTI reached $75 might have been due to "bout of long liquidation in front of the holiday," said Bill O'Grady, chief buy Wellhead market strategist at Confluence Investment Management in St. Louis. And "there is always risk" Trump will release oil from the U.S. Strategic Petroleum Reserve to cap prices, he said.

Oil surged in the past two weeks as the U.S. pushes allies to end imports of Iranian crude, disruptions persist in places like Libya and American crude inventories shrink. Morgan Stanley raised its Brent crude forecast to $85 a barrel through to the third quarter of 2019, citing a tighter buy Wellhead market than previously anticipated.

The Saudi Cabinet "affirmed the Kingdom's readiness to use its spare capacity when needed to deal with any future changes in oil supply and demand rates, in co-ordination with other producing countries," according to a report by the Saudi Press Agency.

Investors had questions as "to whether Saudi Arabia and Russia could or would really be able to ramp oil rig flanges gulf coast production quickly enough," said Rob Haworth, who helps oversee $151 billion at U.S. Bank Wealth Management in Seattle. "The news of their commitment to ramp oil rig flanges gulf coast production quickly enough along with some evidence that Saudi Arabia is ramping oil rig flanges gulf coast production is giving the buy Wellhead market some pause."

West Texas Intermediate crude for August delivery rose 20 cents to settle at $74.14 a barrel on the New York Mercantile Exchange, after earlier rising to as high as $75.27.

A measure of oil buy Wellhead market volatility jumped to the highest since mid-February, before ticking lower.

Brent for September settlement advanced 46 cents to end the session at $77.76 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a $6.17 premium to WTI for September.

U.S. crude stockpiles are forecast to have declined 5 million barrels last week, according to a Bloomberg survey ahead of government data to be released on Thursday. Inventories at Cushing, Oklahoma, fell 2 million barrels last week, according to a separate forecast compiled by Bloomberg.

The industry-funded American Petroleum Institute will release its weekly tally of inventories later on Tuesday.

--With assistance from Tsuyoshi Inajima, Sharon Cho and Grant Smith.

To contact the reporter on this story: Jessica Summers in New York at This email address is being protected from spambots. You need JavaScript enabled to view it..

To contact the editors responsible for this story: David Marino at This email address is being protected from spambots. You need JavaScript enabled to view it., Carlos Caminada, Christine Buurma