NEW YORK (Reuters) - Oil rose on Tuesday, snapping a five-day decline, as expanding U.S. corporate earnings and industrial production eased worries about the economy and a weaker dollar made commodities cheaper for holders of other currencies.
U.S. crude for September delivery rose 53 cents to settle at $75.77 a barrel, after hitting a one-month low of $74.86 during Monday trade.
After settlement, U.S. crude prices pared gains and were up just 23 cents a barrel, following an American Petroleum Institute report, which showed U.S. crude stocks unexpectedly gained 5.9 million barrels last week.
Europe’s Brent crude futures, whose new contract is for October delivery, rose more sharply than U.S. futures, gaining $1.30 a barrel to settle at $76.93.
Brent traded at its widest premium to West Texas Intermediate since mid-June, as crude stocks near 20-year highs in the United States tempered investor appetite for near-term U.S. crude.
Stronger-than-expected earnings reports from bellwether retailers Wal-Mart and Home Depot helped to push U.S. equities higher, with the Standard & Poor’s 500 index gaining 1.2 percent. .N
“Crude futures have rebounded strongly today, following a rally on Wall Street after a string of losses,” said Mark Waggoner, president of Excel Futures in Bend, Oregon.
Data also showed U.S. industrial production expanded in July at twice the pace that economists had expected.
The dollar weakened 0.4 percent against a basket of currencies .DXY. This made oil, which is priced in the U.S. currency, cheaper for foreign currency holders.
The euro firmed after Ireland and Spain attracted strong demand in debt auctions, easing doubts about financial health of euro zone countries.
October Brent traded on Tuesday at a premium of up to 88 cents a barrel to October U.S. crude, its steepest advantage since mid-June.
U.S. crude stocks are near 20-year highs, while combined commercial crude and oil product stocks are at their highest level since 1990, according to government data.
API data on Tuesday showed U.S. crude stocks rose 5.9 million barrels last week, while distillates and gasoline stocks also rose. Analysts polled by Reuters had expected a draw in crude and gasoline, and a more modest build for distillates.
Adding to Brent’s relative strength are crude inventories at Cushing, Oklahoma, WTI’s main delivery point, at near record highs. They stood at 37.7 million barrels in the week through August 6, just shy of a record 37.9 million barrels in mid-May, according to the Energy Information Administration (EIA).
A perceived glut at the NYMEX delivery point can depress near-term WTI prices, which rose less sharply on Tuesday than U.S. oil futures for later delivery.
API data showed Cushing stocks fell slightly last week, by 687,000 barrels.
U.S. gasoline demand normally peaks in the summer driving season, draining inventories. But stocks this summer have risen.
The EIA will publish its own weekly data on Wednesday.
Goldman Sachs, in a weekly commodities research report, told clients it is likely that global oil demand has recently been outstripping supply by 600,000 barrels a day on a seasonally adjusted basis.
The U.S. bank pointed to a 40 million to 45 million barrel drawdown in oil stocks kept on tankers at sea over June and July, which it said far outweighed a rise in global onshore stocks, estimated by the International Energy Agency to have risen by around 21 million barrels.
Additional reporting by David Sheppard and Emma Farge in London, Gene Ramos and Robbert Gibbons in New York, and Alejandro Barbajosa in Singapore; Editing by Marguerita Choy