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Oil prices rose on Tuesday, supported by a softer dollar and a U.S. plan to restock petroleum reserves, but gains were capped by uncertainty over the impact of rising COVID-19 cases in top oil importer China.

Brent crude futures were up 50 cents, or 0.65%, at $80.30 a barrel by 1035 GMT, adding to a 76 cent gain in the previous session.

U.S. West Texas Intermediate (WTI) crude futures rose $1, or 1.31%, to $76.19 after climbing 90 cents on Monday.

Oil prices have been buoyed by U.S. plans announced last week to buy up to 3 million barrels of oil for the Strategic Petroleum Reserve after this year's record release of 180 million barrels.

A weaker dollar has also supported prices, making oil cheaper for those holding other currencies.

"Oil prices could see further upside, as we expect physical markets to tighten further on the back of supply constraints and stronger global demand," Qatari bank QNB said in a note, predicting prices at $90-$115 a barrel in the coming quarters.

OANDA analyst Edward Moya said in a note that clear signs of growing demand are needed for prices to climb further.

"The oil demand outlook will be key for how high crude prices can go," he said, adding that clarity on that could prove elusive given mixed signals on the reopening of China's economy.

While China has been relaxing pandemic restrictions, a surge in COVID-19 cases has been bearish for oil markets because of uncertainty over the country's economic recovery, said CMC Markets analyst Tina Teng.

Cities across the country have been racing to add hospital beds and build fever-screening clinics amid growing international concern that Beijing's decision to dismantle its stringent "zero-COVID" regime could result in deaths and virus mutations.

"Crude's gains, although moderate, feel tentative. I expect downward pressure from global economic concerns to prevail," said Vandana Hari, founder of Vanda Insights in Singapore.

U.S. crude oil stocks were expected to have dropped last week by about 200,000 barrels while gasoline and distillates inventories were expected to be higher, a preliminary Reuters poll showed on Monday.

The poll was conducted ahead of reports from the American Petroleum Institute on Tuesday and the Energy Information Administration on Wednesday.