
U.S. oil rose nearly 3 percent Tuesday as supply disruptions of 2.5 million barrels per day in Canada and elsewhere offset concerns about growing record high U.S. crude stockpiles.
A series of attacks on Nigeria's oil infrastructure has pushed crude output close to a 22-year low in Africa's largest oil producer, Reuters data showed.
In Canada alone, a wildfire that scorched a sizable part of Alberta's oiltown Fort McMurray has knocked out 1.6 million bpd from producers and pipeline operators that have shut facilities as precaution, consultancy Energy Aspects said.
Repair crews on Tuesday were assessing the damage after an initial inspection by officials showed the Canadian energy boomtown was spared the worst as nearby oil sands companies looked to resume production.
The disruptions eclipsed worries about rising U.S. crude inventories, which were expected to have grown for a fifth straight week last week to record highs above 543 million barrels. Data from the American Petroleum Institute, due at 4:30 p.m. ET, was expected to show a half a million-barrel build.
"I think we are still in bull market, but I also think the headwinds are increasing," Scott Shelton, energy broker with ICAP in Durham, North Carolina, said, referring to the heightened volatility in crude futures since April's rally of 20 percent or more.
Brent crude futures were up more than 4 percent, at $45.55. On Monday, it fell 3.8 percent.
U.S. crude futures settled $1.22 higher, or 2.8 percent, at $44.66 a barrel.
Refined products were also firmer, with U.S. gasoline futures gaining 2 percent and ultra-low sulfur diesel, also known as heating oil, soaring 3 percent. Both had fallen about 4 percent in the previous session.
Macquarie said in a research note that with crude production in decline in the United States and outside the Organization of the Petroleum Exporting Countries, global oil markets could be on the path to rebalance by the end of 2016.
"With firmer Q4/Q1 activity driving these observed declines, we remain confident that activity levels will need to rise and WTI prices will need to stay above $40 for U.S. land production to stabilize in a timely manner," it said.
Weekly data on speculative holdings of crude futures has shown investors are cooling a little towards oil.
"We've seen the market slump 10 pct from the highs since this (Canada) news came in, which suggests that there are other fish to fry at the moment," Saxo Bank senior manager Ole Hansen said.
"The big reaction yesterday to the change in Canada gave an indication that the market has become a bit more focused on selling into rallies..."