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MELBOURNE - Oil prices rose on Tuesday, extending gains from the previous session, as the European Union firmed up plans to tighten sanctions on Russia this week, with Germany saying it was prepared to back an immediate embargo on Russian oil.

Brent crude futures rose 25 cents, or 0.2%, or $107.83 a barrel at 0234 GMT, while U.S. West Texas Intermediate (WTI) crude futures climbed 17 cents, or 0.2%, to $105.34 a barrel.

"Crude prices are up after comments from Germany's economy minister, which noted that the EU plans to ban Russian oil imports either immediately or in a few months," said Stephen Innes, managing partner at SPI Asset Management.

The European Commission is expected to finalise work on Tuesday on a sixth package of European Union (EU) sanctions against Russia over its actions in Ukraine, which would include a ban on buying Russian oil.

The embargo may spare Hungary and Slovakia, both heavily dependent on Russian crude, two EU officials said on Monday.

Tight fuel product supplies are adding to demand for crude, which helped drive up Brent and WTI by more than 40 cents on Monday after a volatile session.

Record exports from the U.S. Gulf are eating into supplies to the domestic U.S. market, ANZ Research analysts said in a note. ANZ said that according to the cargo tracking service Vortexa Analytics at least 2 million barrels per day of gasoline, diesel and jet fuel flowed out of refineries in the U.S. Gulf in April.

As a result, ANZ said the diesel crack spread, the margin on refining a barrel of oil into fuel products, had widened to $73.50 a barrel, the highest since 1986.

Traders will be closely watching U.S. inventory data, with the American Petroleum Institute industry group reporting stockpiles for the week ended April 29 on Tuesday followed by government data from the Energy Information Administration on Wednesday.

Five analysts polled by Reuters on average expected U.S. crude inventories fell by 1.2 million barrels in the week to April 29.

They also forecast distillate inventories, which include diesel and heating oil, declined by 1.2 million barrels, while gasoline stockpiles fell by 300,000 barrels.