Summary Oil prices rebounded Tuesday as traders expected another fall in US crude inventories.
NEW YORK (AFP) - Oil prices rebounded Tuesday as traders expected another fall in US crude inventories would help ease the long-running global oversupply weighing on the market.
US benchmark West Texas Intermediate (WTI) for February delivery rose $1.06 to $37.87 a barrel on the New York Mercantile Exchange, reversing much of Monday s loss.
In London, Brent North Sea crude for February delivery, the European benchmark for crude oil, advanced $1.17 to $37.79 a barrel.
"Analysts are expecting to see a drawdown" in US weekly inventory reports, said Oliver Sloup at iiTrader.com.
The American Petroleum Institute releases its stockpiles report later Tuesday and the more closely watched US Department of Energy (DoE) report comes out Wednesday.
In addition, Sloup said, "there is some housekeeping before the end of the year" as investors arrange portfolios to limit exposure to the risk of betting too much on falling prices.
The DoE s announcement last week of an unexpected fall in US commercial crude stockpiles, by 5.9 million barrels, briefly had pushed prices higher.
On Wednesday the DoE is expected to report crude inventories fell by 2.5 million barrels for the week ended December 25, according to a Bloomberg News survey of analysts.
Citi Futures analyst Tim Evans suggested that weather may be turning in the market s favor.
"Petroleum futures prices are springing back from Monday s weakness, with the prospect of cooler January temperatures in both Europe and the US helping lift heating oil and gasoil prices on either side of the Atlantic," he said.
On Monday, WTI dropped more than three percent on disappointing economic data from China and Japan and Saudi Arabia s budget plan that signaled the world s largest crude-oil exporter is planning for prices to stay low.
The OPEC kingpin posted a record budget deficit for this year as it suffers from global oil prices down more than 60 percent since mid-2014.
"The Saudi budget... reinforced the lower for longer sentiment in that market," said analyst Augustin Eden at traders Accendo Markets, referring to the Saudi-backed OPEC policy of pushing oil prices lower to hurt non-OPEC producers.
