Oil up as covering support stops slide to 11-year low
By Barani Krishnan
NEW YORK (Reuters) - Oil prices rose for a second straight day on Tuesday as short-covering and technical support halted a slide to 11-year lows, but the market remained fundamentally weak from oversupply, traders and analysts said.
Government data on U.S. crude inventories and an expected Federal Reserve interest rate increase would dictate Wednesday's direction, they said.
Brent crude futures settled up more than 1 percent while U.S. crude's West Texas Intermediate (WTI) futures rose nearly 3 percent as oil bears once again failed to push prices to below a seven-year trough.
"Everyone was looking at 11-year lows, but I think people got a sense of 'bids' when they tried probing there," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland. "But I'd be surprised if they don't come back and take it down."
Brent LCOc1 settled up 53 cents at $38.45 a barrel, after reaching a session high at $39.41. On Monday, the global oil benchmark came within 14 cents of a December 2008 bottom of $36.20, unleashing a surge of buying support.
WTI CLc1 settled up $1.04 at $37.35. It fell to $34.53 on Monday, the lowest since its financial crisis bottom of $32.40.
The market remained positive in post-settlement trade after a surprise build of 2.3 million barrels in U.S. crude stockpiles reported by industry group American Petroleum Institute for last week. [API/S]
A Reuters poll of analysts had forecast a 1.4 million-barrel draw instead for last week. Official inventory data is due on Wednesday from the U.S. Energy Information Administration (EIA) [EIA/S] Continued...