Oil rises after Obama says no to crude exports

Obama doesn't support bill to lift ban on crude exports

West Texas Intermediate crude closed higher on Tuesday after the White House said it does not support a move by the U.S. House of Representatives to repeal a 40-year-old ban on exports of crude oil.

"This is a policy decision that is made over at the Commerce Department, and for that reason, we wouldn't support legislation like the one that's been put forward by Republicans," White House spokesman Josh Earnest told reporters at a briefing.

U.S. oil, also referred to as WTI crude, closed up about 1.3 percent, at $44.59 a barrel. It rose more than $1 at the session high, hitting $45.03. Brent crude was up 40 cents at $47.80 a barrel on its October contract, which expires as front-month at Tuesday's settlement. October Brent lost $1.77, or almost 4 percent, on Monday.

Wall Street's benchmark index surged almost 1 percent on upbeat U.S. retail sales data for August.

The oil markets were also eyeing weekly U.S. oil inventory data after market intelligence company Genscape said in an estimate on Monday that crude stocks at the key U.S. crude delivery point Cushing, Oklahoma fell 1.8 million barrels last week.

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A preliminary Reuters poll indicated that U.S. crude stockpiles likely remained flat last week, after four straight weeks of gains.

The American Petroleum Institute (API) will issue its weekly report on U.S. inventories after the market's settlement, at 4:30 p.m. EDT (2030 GMT) while the U.S. Energy Information Administration will issue its data on Wednesday.

"We're just trading around the edges before tonight's API, in line with the better stock market and predictions of declining U.S. crude production," said John Kilduff, partner at New York energy hedge fund Again Capital.

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U.S. crude's outperformance versus Brent has narrowed the spread between the two benchmarks to an eight-month low below $2 a barrel. The spread contracted to $1.31 a barrel on Tuesday, its smallest since late January, after it settled on Monday at $2.37.

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The outlook for U.S. crude improved after positive forecasts this week by the EIA and other influential entities such as the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC).

The EIA forecast on Monday that U.S. shale oil output would drop for a sixth straight month in October.

The IEA and OPEC have cut forecasts for non-OPEC and U.S. oil supply, predicting an easing of the global crude glut by next year.

"The market remains oversupplied, but the pace of stock builds is moderating," Energy Aspects said in a report. "The Asian demand outlook is not rosy but it is not collapsing either."