Oil rises on U.S. data, bets for crude stockpile drop
By Barani Krishnan
NEW YORK (Reuters) - Oil prices settled up on Tuesday, with U.S. crude rallying as much as 2 percent, after bullish economic data and bets for lower crude stockpiles in the United States, the world's largest oil consumer.
Short-covering ahead of Thursday's expiry of the key front-month contract in U.S. crude also helped the market advance from a 6-1/2-year low hit on Friday.
"After selling precipitously over the last several days, oil prices were technically stretched and oversold on a near-term basis, leading to a bounce into the close," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.
New York-traded U.S. crude CLc1 settled up 75 cents at $42.62 a barrel after U.S. housing starts hit a near eight-year high in July.
Brent LCOc1, the London-traded global benchmark for oil, settled up 7 cents at $48.81, snapping a three-day decline. Brent was initially down on Tuesday morning after a stock market plunge in China, the No. 2 oil consumer.[MKTS/GLOB]
In post-settlement trade, however, U.S. crude pared gains and Brent slipped back into negative territory despite an industry group indicating that U.S. crude inventories may have fallen more last week than initially thought.
The American Petroleum Institute reported after the market's close that there was a drawdown of 2.3 million barrels for the week ended Aug. 14. A Reuters poll of analysts expected a drop of about 800,000 barrels for the week.
Official inventory data will be issued on Wednesday by the U.S. Energy Information Administration. [EIA/S] Continued...