The West Texas Intermediate (WTI) for January delivery increased 2.22 U.S. dollars, or 3 percent, to settle at 75.39 dollars a barrel on the New York Mercantile Exchange. Brent crude for February delivery rose 2.69 dollars, or nearly 3.5 percent, to close at 80.68 dollars a barrel on the London ICE Futures Exchange.
Lending buoyancy to oil was the continued shutdown of a key pipeline.
The Keystone pipeline, which normally transports around 620,000 barrels of oil per day from the oil sand fields in Canada to refiners in the U.S. Midwest and the Gulf Coast, remains closed following a leak and it is still unclear when it will be able to go back into operation.
"Earlier optimism that the pipeline was going to be brought back on rather quickly is diminishing right now. The longer it's down the bigger risk we have to the upside for both oil and products," Phil Flynn, senior energy analyst at The PRICE Futures Group, said Tuesday in a note.
Oil prices also garnered some support as the U.S. dollar plunged after the U.S. consumer inflation for November came in lower than expected.
The dollar index, which measures the greenback against six major peers, fell 1.09 percent to 103.9840 in late trading on Tuesday. Historically, the price of oil is inversely related to the price of the U.S. currency.
Latest comments