Brent oil rose on Tuesday, backed by strong gasoline and heating oil prices that were boosted by persistent cold weather in the U.S., and expectations of another large draw in distillates.
Frigid weather supported heating oil prices and U.S. RBOB futures saw some strength from traders unwinding the spread trade between heating fuel and gasoline, one trader said.
Markets showed little reaction to U.S. Federal Reserve Chair Janet Yellen's remarks that she will not make any abrupt changes in the U.S. central bank's monetary policy, and that the Fed will continue to reduce its stimulus.
U.S. crude ended down 12 cents at $99.94 per barrel, marginally supported by a strong U.S. equities market but capped by a stronger U.S. dollar. Brent crude was last flat under $109 a barrel, after settling 94 cents lower in the previous session.
U.S. crude was still close to a six-week high, supported by expectations of a drop in distillate inventories last week due to freezing weather across the country. Distillate stocks, including heating oil and diesel fuel, are expected to drop by 2.3 million barrels in the week to Feb. 7, according to analysts in a Reuters poll. U.S. crude oil inventories are expected to rise by 3 million barrels.
The American Petroleum Institute will release its oil inventory data at 4:30 p.m. Eastern on Tuesday, while the U.S. Energy Information Administration will release its weekly inventory report to at 10:30 a.m. Eastern on Wednesday.
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