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Oil prices ticked higher on Tuesday as markets weighed supply cuts for August by top exporters Saudi Arabia and Russia against a weak global economic outlook.

On Monday, Saudi Arabia said it would extend its voluntary output cut of 1 million barrels per day (bpd) to August, while Russia and Algeria volunteered to lower their output and export levels for August by 500,000 bpd and 20,000 bpd respectively.

If fully implemented, that would lead to a combined reduction of 5.36 million bpd versus August 2022 levels - possibly even more as several countries in the OPEC+ producer group are unable to fulfil their output quotas, said PVM analyst Tamas Varga.

Brent crude futures were up $1.28, or 1.7%, to $75.93 a barrel at 1222 GMT. U.S. West Texas Intermediate crude was at $71.05 a barrel, up $1.26 or 1.8%.

However, oil benchmarks settled down about 1% in the previous session, after an initial rally, on the back of a gloomy macroeconomic outlook.

Tuesday morning trade suggests little has changed in oil dynamics despite Monday's announcements, Craig Erlam, OANDA analyst told Reuters.

"Only a significant break above $77 will suggest something has changed, otherwise range-bound trade could well continue."

Business surveys have shown a slump in global factory activity because of sluggish demand in China and Europe, and U.S. manufacturing also fell further in June - reaching levels last seen in the initial wave of the COVID-19 pandemic.

This broader uncertainty will likely overshadow the OPEC+ effort to tighten supply, some analysts said.

Even before these new cut announcements, International Energy Agency (IEA) data suggested the oil market was set to show a supply deficit of roughly 2 million bpd in the third and fourth quarters, noted Commerzbank analysts.

Still, oil prices did not jump significantly on the news, largely due to demand concerns, particularly given sluggish economic recovery in China following the lifting of coronavirus restrictions. Meanwhile, rising interest rates in the U.S. and Europe to address persistently high inflation are expected, they said.

U.S. markets will be closed on Tuesday for the Independence Day holiday.