By Claudia Assis and Barbara Kollmeyer, MarketWatch
SAN FRANCISCO (MarketWatch) Crude-oil futures on Tuesday settled at their highest in a week, as markets turned more optimistic about prospects for oil demand after positive macroeconomic reports from the euro zone and the U.S.
Crude for September delivery advanced 70 cents, or 0.8%, to $93.43 a barrel on the New York Mercantile Exchange. That was oils highest settlement since Aug. 7 and its first gain in three sessions.
So far this month, crude is up 6.1%, although year-to-date it has lost 5.5%.
Oil fell 0.2% Monday amid low volumes and declines in U.S. equities. Geopolitical tensions and ensuing supply worries had driven oil up for most of the session, however, with traders mulling news reports that hinted to a possible escalation in tensions between Israel and Iran.
S&P 500 snaps six-day win streak
The Standard & Poor's 500-stock index headed for its first decline in seven sessions, as materials and energy shares led a broad-based decline.
Some of that geopolitical fear provided underlying support for crude futures on Tuesday, said Bill ONeill, a principal with Logic Advisors in New Jersey.
We continue to have a firmer tone ... U.S. data was reasonably constructive and euro-zone numbers were also positive, he added.
Prices have had a good run, however, and ONeill said he wouldnt be a buyer at current levels. Investors should not go short, or bet oil prices will go lower, but some profit-taking may be advisable, he added.
If we didnt have Syria, if we didnt have a somewhat heated Iran-Israel situation, we wouldnt be where we are now, ONeill said.
Sentiment got a boost earlier as gross domestic product for both Germany and France the largest European economies came in slightly better than expected.
U.S. stocks inched higher on the news from the euro zone and on U.S. retail data. Stocks are seen as a barometer of market activity and thus a gauge of future oil demand. Read more on U.S. stocks.
The Commerce Department reported a 0.8% increase in retail sales for July the biggest gain in sales since February and an increase that beat analyst expectations. Retail sales jump in July.
U.S. wholesale prices also rose in July, up 0.3% on higher food costs, the Labor Department said. The increase in wholesale-level inflation was slightly above forecast. See more about wholesale prices.
Among other energy futures, natural gas for September delivery rose 10 cents, or 3.9%, to $2.83 per million British thermal units.
That was also natural gass first gain in three sessions, and its largest one-day dollar and percentage gain since July 30.
September heating oil gained 2 cents, or 0.5%, to end at $3.03 a gallon.
September gasoline spent most of the session in the red, but reverted higher and ended up 1 cent, or 0.4%, at $3 a gallon.
