NEW YORK U.S. crude retreated from the year's high as oil prices settled steady to a shade firmer on Tuesday after deadly blasts in Brussels, taking their lead from a Wall Street rebound ahead of oil inventory data.
Global equity markets reversed losses while safe-haven gold and government bonds pulled back from higher levels reached in the wake of attacks at Belgium's airport and a rush-hour metro train by the Islamic State that killed at least 30 people.
The oil market is also awaiting a clearer picture on U.S. inventories when the American Petroleum Institute, an industry group, issues its inventory data for last week at 4:30 p.m. EST (2030 GMT).
Analysts polled by Reuters expect the U.S. government to report on Wednesday that domestic crude stockpiles last week rose 3 million barrels to a sixth straight week of record highs. [EIA/S]
Brent crude LCOc1 settled up 25 cents at $41.79 a barrel, rebounding from a session low of $40.97.
U.S. crude CLc1 finished down 7 cents at $41.45, after falling as low as $40.77 earlier.
On Wall Street, shares of oil giant Exxon Mobil Corp (XOM.N) were among those that rebounded from an early slide in U.S. stocks .SPX triggered by the attacks. [.N]
Oil has traded in concert with equities for most of this year. Tuesday's rebound came despite the dollar .DXY turning higher in late trading, making commodities denominated in the greenback less affordable to holders of the euro EUR= and other currencies. [FRX/]
"Oil is very much distracted by macro events today, gauging the sentiment in broader markets and taking its lead from that," said Matthew Smith, director of commodity research at the New York-headquartered Clipper Data.
Even so, some traders and analysts warned of potential profit-taking in oil in the coming days, to offset some of the market's huge rally since February despite marginal improvements in supply-demand.
U.S. crude's new front-month contract hit a 2016 high of $41.90 earlier on Tuesday on reports of the first drawdown in inventories at the Cushing, Oklahoma delivery hub for U.S. futures since January.
With Brent also hitting the year's peak of $42.54 on Thursday, the market has roughly rebounded 50 percent above where crude prices were six weeks ago, when they traded at 12-year lows before OPEC and other major oil producers announced a plan to freeze output at January levels.
"I wouldn't be surprised to see some market participants ... saying the price increase that we've had has been enough," Commerzbank strategist Eugen Weinberg said.
(Additional reporting by Amanda Cooper in LONDON; Editing by Marguerita Choy)
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Published Date: Mar 23, 2016 01:45 am | Updated Date: Mar 23, 2016 01:45 am