The West Texas Intermediate for March delivery grew 2.29 U.S. dollars, or 2.75 percent, to settle at 85.60 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for March delivery advanced 1.93 U.S. dollars, or 2.24 percent, to close at 88.20 dollars a barrel on the London ICE Futures Exchange.
The U.S. Department of Defense announced Monday that some 8,500 U.S. troops have been put on heightened alert for a possible deployment due to escalating tensions on the Russia-Ukraine border, with no decision on formal deployments.
The market tone stays strong, supported by heightening geopolitical risk, according to Chiyoki Chen, chief analyst at Sunward Trading.
"With the high-volume reversal on stocks and with the comeback on oil to close above the 10 day moving average, that should, at least for oil, put us into a serious buy the breaks mode," said Phil Flynn, senior market analyst with The PRICE Futures Group on Tuesday.
Flynn expected that this week's oil inventory report would show a 3.0 million barrel drawdown in crude oil supplies with distillate inventories down by about 1.0 million barrels and gasoline supplies by 1.0 million barrels.
U.S. commercial crude stocks fell 2.1 million barrels in the week ended Jan. 21, according to the latest survey of analysts by S&P Global Platts
Meanwhile, U.S. distillate stocks decreased 1.6 million barrels while gasoline stocks climbed up 2.2 million barrels in last week, according to the survey.
"We also estimate a positive crude balance of around 200,000 barrels per day over Q1, with the market turning long already in February. So, while we expect flat prices to remain elevated, we also forecast a drop back into a 75-80 U.S. dollars per barrel range," said a research note by JBC Energy on Monday.
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