Light, sweet crude for May delivery settled 66 cents, or 0.7%, higher at $93.36 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange gained 62 cents to $104.74 a barrel.
The gains ended a streak of three straight losing sessions for U.S. crude, while Brent rebounded Monday after flirting with eight-month lows. Analysts and traders said prices were due for a bounce following last week, when U.S. oil prices fell by 4.7%. A jump in gasoline futures, which settled 1.6% higher, provided the spark, said Walter Zimmermann, chief technical analyst at United-ICAP.
“Gasoline has pretty much been leading to the downside. Today we got a rebound,” said Mr. Zimmermann. He said the approach of summer-driving season, when fuel demand jumps as drivers hit the roads for vacation and other trips, means investors in all oil and fuel markets are keeping an eye on gasoline.
“Everybody is connected to gasoline this time of the year,” he said.
Front-month May reformulated gasoline blendstock, or RBOB, rose 4.57 cents to $2.9093 a gallon.
After reaching above $97 a barrel at the beginning of April, U.S. oil prices are holding in the low $90-a-barrel range. Brent crude’s recent declines have been steeper, with futures slumping after reaching highs above $118 a barrel in February. In addition to a decline in fuel prices, traders are also abandoning bullish oil bets because of an improving supply situation.
Last week, the U.S. Energy Information Administration said domestic oil inventories rose to 388.6 million barrels, the highest level since 1990. Analysts expect a further increase of 1.2 million barrels in data due Wednesday, according to a preliminary survey by Dow Jones Newswires.
Still, the steeper drop in Brent has resulted in a shrinking gap between Brent and Nymex-traded West Texas Intermediate crude, or WTI. Brent, which had traded at a premium of more than $20 a barrel earlier this year, was settled Monday just over $11 a barrel higher than U.S. crude futures.
Analysts and investors say they are looking ahead this week to gauges on the global economy. In particular, oil prices could react sharply to any statements from the Federal Reserve Federal Open Market Committee, which will make its monthly announcement on interest rates Thursday.
Jim Ritterbusch, head of oil-trading adviser Ritterbusch and Associates, said the oil and energy markets appear “much more sensitive to negative economic headlines” than the stock market, and any possibility that the central bank may begin to scale back its stimulus efforts “could still force a broad-based exit of capital” out of financial markets.
May heating oil settled 4.46 cents, or 1.6%, higher at $2.9550 a gallon.
*Jerry DiColo, Dow Jones Newswires