The European benchmark, Brent crude for September delivery rose 27 cents, to settle at 108.42 dollars a barrel in London trade. The gains came as investors anticipated another large drawdown in U.S. crude inventories. U.S. crude stockpiles unexpectedly large decline in the last three weeks, helping push oil prices higher.
Analysts expect the Energy Department report on Wednesday showed a decline of 2.1 million barrels, according to a Dow Jones Newswires survey of analysts. Anticipation report "stop selling" in WTI, said Matt Smith, an analyst at Schneider Electric.
After trading sharply discounted to Brent in the most recent years, WTI in recent days has returned to near parity with the European benchmark, was trading even higher. On Friday, the price of WTI reached as high as 109.32 U.S. dollars per barrel, a level last seen 16 months ago.
Smith said some of the pressure on WTI was inevitable after recently soaring. But after lower in the morning, WTI moved into positive territory in the afternoon. Smith said the oil also received support from the latest round of violence in Egypt and from the comments the Prime Minister of China Li Keqiang said China may impose the additional economic stimulus to encourage growth.
Michael Truscelli, broker and trader at Paramount Options, said on Tuesday the news flow is generally "very quiet," but some traders focused on issues in Libya's oil shipments.
"The problem we heard is libya's export," said Truscelli.
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