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Oil prices rise as equities stabilise
[NEW YORK] Oil prices rose on Tuesday, benefiting from a more benign outlook for commodities as shares of mining giant Glencore rose and equity markets stabilized.
US benchmark West Texas Intermediate for November delivery advanced 80 cents to US$45.23 a barrel on the New York Mercantile Exchange.
European benchmark Brent oil for November delivery added 89 cents at US$48.23 a barrel in London.
On Monday, oil prices sank along with US and European equities following dismal Chinese industrial data that reignited doubts about the world's second-biggest economy and petroleum market.
Especially hard-hit was Swiss mining giant Glencore, which plummeted 29 per cent as an analyst questioned the company's prospects given its heavy debt load.
But Glencore shares rallied on Tuesday after the company said its business is "operationally and financially robust" and that it faced no solvency issues.
Other markets were also more benign.
Copper prices rose for the first time in six days and US stocks spent much of the day in positive territory.
"The whole Glencore situation has stabilised a bit," said Bart Melek, head of commodity strategy at TD Securities.
"I think there's probably a view out there that the commodity correction might have been overdone a little bit." Analysts said traders were also looking ahead to Wednesday's US oil inventory report, which is expected to show lower supplies, in part due to an anticipated drop in US crude production.
Analysts expect price action in the oil market to remain choppy.
"We find ourselves in a highly volatile day-to-day price environment, as prices are unwilling to push too much higher given the backdrop of oversupply, but are unwilling to push too much lower given an ongoing narrowing of the imbalance amid strong demand," said Matt Smith, analyst at ClipperData.