Oil rises 2%, extends gains as major producers flag capacity limits

G7 agrees to explore cap on Russian oil price; Macron tells Biden that UAE, Saudi can barely raise oil output; political unrest in Ecuador, Libya could further tighten supply

Oil prices rallied for a third day on Tuesday as major producers Saudi Arabia and the United Arab Emirates looked unlikely to be able to boost output significantly while Western governments agreed to explore ways to cap the price of Russian oil.

Brent crude futures climbed $2.90, or 2.5%, to $116.28 a barrel by 12:33 p.m. EDT (1633 GMT). U.S. West Texas Intermediate (WTI) crude rose $2.35, or 2.1%, to $111.92 a barrel.

Both contracts extended the previous session's gains of nearly 2% after the Group of Seven economic powers vowed to ratchet up existing Western pressure on Russia from sanctions over