NEW YORK - Oil prices rose on Tuesday, as support from the possibility of supply disruptions and a strong equities market offset the effects of profit-taking following last week's rally above three-year highs.
Brent crude oil futures <LCOc1> gained 16 cents to settle at $71.58 a barrel, while U.S. crude futures <CLc1> rose 30 cents to settle at $66.52.
"It seems as though the volatility has, for the most part, dissipated and part of that can be attributed to the lack of escalation in the events over the weekend, and we have an S&P that's a little bit stronger today," said Brian LaRose, technical analyst at United-ICAP.
The S&P 500 <.SPX> and the Dow Jones Industrial Average <.DJI> were both up about 1 percent Tuesday. [.N]
Over the weekend, the United States and allies launched air strikes on Syria, raising concerns about continued access to regional crude supplies.
Such concerns compounded existing supply worries related to the possibility of renewed U.S. sanctions against Iran and falling output in troubled Venezuela.
Brent has risen 1.8 percent so far this month. It hit a peak last week of $73.09, the highest since late 2014.
"The rally upwards was purely on geopolitical risk and if now we haven't had any further stimulus, we're seeing prices slip off a bit," Natixis commodities strategist Joel Hancock said.
Still, analysts expected uncertainty over the Iran nuclear deal to continue to support prices through May 12, the deadline that U.S. President Donald Trump gave to Congress and European allies to "fix" the deal.
If Washington does not renew sanctions relief, Iran may have difficulty exporting crude.
Bullish enthusiasm over the outlook for oil prices, however, might be contained by an increase in supplies in Cushing, Oklahoma, the delivery point for U.S. crude futures.
"We've seen that front May-June spread in WTI swing back into contango today. And that's somewhat of a bearish...it implies a continued up trend in Cushing crude supply," said Jim Ritterbusch, president of Ritterbusch and Associates.
"There's not much volatility today, as we wait for API and EIA data," Ritterbusch said.
The American Petroleum Institute publishes weekly U.S. inventory data later on Tuesday, while data from the Energy Information Administration (EIA) is due Wednesday.
"If we can...move higher tomorrow that would be a constructive sign," said LaRose.
"We want to see follow through in order to be sure that this is a break out and not a fake out," he said.