NEW YORK Oil markets closed up as much as 2 percent on Tuesday, before giving back most of their gains in post-settlement trade after data suggesting a huge build in U.S. crude stockpiles already at record high levels.
The American Petroleum Institute, an industry group, said domestic crude inventories rose by 9.9 million barrels last week, way above a 3.6 million barrels increase expected by analysts in a Reuters poll. [API/S] [EIA/S]
API's numbers often vary to official supply-demand figures for oil released each Wednesday by the U.S. Energy Information Administration (EIA).
Even so, some traders braced for the possibility of the EIA reporting a large build as well in crude inventories for last week that could cut short the oil market rebound of the past two weeks. Crude prices rose in eight of the last 13 sessions, gaining 22 percent in all.
"This is a big build that surprised even me," said Tariq Zahir, an oil bear who has bet on weaker U.S. crude oil prices for more than a year now. "If the EIA has equally bearish numbers tomorrow, we can really see pressure come on to this oil rally."
U.S. crude CLc1 was up 14 cents, or 0.4 percent, at $33.89 a barrel by 5:17 p.m. EST (2217 GMT). It had settled up 65 cents, or 2 percent, at $34.40 a barrel.
Brent LCOc1, the global benchmark for crude, was up 4 cents at $36.61, after trading in the negative earlier. It had settled up 24 cents, or 0.6 percent, at $36.81.
Oil rose during the session after being buoyed by a rally on Wall Street. Equity markets and oil have mostly traded in tandem for weeks and Wall Street's key index for U.S. stocks, the S&P 500 .SPX rose more than 2 percent on Tuesday.
Crude prices were also supported by Russian Energy Minister Alexander Novak's remarks that oil firms in the country support a pledge to average production this year at January's levels.
Russian President Vladimir Putin spoke of "more radical" measures to balance the global oil market, on top of a production freeze plan jointly pursued by Moscow with Saudi Arabia, Qatar and Venezuela.
Crude prices have trended higher since hitting 12-year lows under $30 a barrel between late January and mid-February. Despite the rebound, the market is still down about two-thirds from highs above $100 in mid-2014.
(Additional reporting by Karolin Schaps in London; Editing by Marguerita Choy and Chris Reese)
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Updated Date: Mar 02, 2016 04:45 AM