NEW YORK Oil markets rose as much 2 percent on Tuesday, maintaining their charge higher, after a Wall Street rally helped turn around crude prices depressed initially by expectations that U.S. inventories had hit another record high.
Russian Energy Minister Alexander Novak's remarks that oil firms in the country support a proposal to maintain average production at January's levels also supported crude prices, traders said.
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.
Brent LCOc1, the global benchmark for crude oil, was up 20 cents, or 0.6 percent, at $36.77 a barrel by 1:46 p.m. EST (1846 GMT), after touching a session low at $35.95.
U.S. crude CLc1 was up 65 cents, or 2 percent, at $34.40 a barrel, after an intraday low at $33.37.
"Stock markets have been steady and consistently stronger today," David Thompson, broker at Washington-based Powerhouse, said, explaining the turn around in oil.
Wall Street's key index for U.S. stocks, the S&P 500 .SPX, rose nearly 2 percent, hitting near two-month highs. Equity markets and oil have mostly traded in tandem for weeks now. [.N]
Crude prices have risen in seven of the past 12 sessions, rebounding from 12-year lows hit below $30 a barrel between late January and mid-February. The market is still down about two-thirds from highs above $100 in mid-2014.
Some analysts were doubtful though that crude prices could continue pushing higher without a significant drop in global output.
"It still feels like this is a sucker's rally," said Matt Smith, director of commodities research at New York-based Clipper Data. "We've pushed higher on more talk and less action on supply balancing."
Traders said some players who had been long oil had possibly booked profit earlier in the session on analysts forecasts of U.S. crude inventories rising 3.6 million barrels last week to reach record highs of around 510 million barrels. [EIA/S]
The American Petroleum Institute, an industry group, will issue supply-demand data for last week at 4:30 p.m. (2130 GMT). The U.S. Energy Information Administration will issue official inventory data on Wednesday.
(Additional reporting by Karolin Schaps in London; Editing by Marguerita Choy)
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Updated Date: Mar 02, 2016 01:30 AM