Oil Ends Near Session Highs With Help From Stock Rally
Oil prices climbed toward $61 a barrel, drawing strength from a rebound in global equities and on forecasts for a drop in gasoline inventories in the United States, the top consumer.
Crude also gained after Royal Dutch Shell cut oil output in Nigeria by 187,000 barrels per day and winter staged a last stand in parts of the United States, implying greater heating fuel demand.
U.S. crude settled up 62 cents or 1% to $60.69, having dropped $1.57 on Monday to touch a two-week low of $59.55.
European shares showed the first signs of recovery from a five-day losing streak and analysts said that despite concern about slowing economic growth, there was no sign yet of weakening oil use in major consumers.
"Even with all these macroeconomic concerns, there is no evidence as yet of any impact on U.S. and Chinese demand on the oil side," said Mike Wittner of investment bank Calyon.
Shares across most of Asia gained 1% to 2% and European indexes posted smaller gains. The FTSEurofirst 300 was up 0.8% and the Dow Jones Industrial Average rose about 1%.
In Nigeria, Shell cut oil output after a spill, adding to supply losses detailed by companies working in Africa's top exporter. A U.S. cold snap also gave a lift to prices.
Temperatures in the U.S. Northeast were seen 18-25 degrees below normal on Tuesday and more cold is expected on Wednesday, forecaster DTN Meteorlogix said.
Oil has been relatively immune to the sell-off in global equities since last week, lifted by a strong U.S. gasoline market and OPEC member Iran's dispute with the United Nations over its nuclear work.
But crude fell more than 2% on Monday, succumbing to concern over the implications of falling stocks for economic growth and fuel use, and some analysts said the volatility may not have ended.
"We need to see a few more days of upside follow-through before this equity correction could be said to have run its course, allowing the commodity markets to decouple in the process," Man Financial said in a report.
The latest snapshot of U.S. oil supplies is due out on Wednesday and is expected to show gasoline stocks fell.
Analysts polled by Reuters expect a 1.4 million-barrel decline in U.S. gasoline inventories and a 2.0 million-barrel rise in crude stocks.
Gasoline becomes a focus for the oil market before the U.S. summer months when demand for the motor fuel rises as drivers take to the road for holidays.
Despite oil's retreat, prices remain near the highest level in two months and above a 20-month low hit on Jan. 18 of $49.90. Oil reached a record high of $78.40 last year.