Oil prices recover

AFP

Singapore

Oil prices enjoyed rare gains in Asian trade Tuesday, with Brent crude bouncing back from an 11-year low as investors await a closely watched US crude inventory report.

At 0600 GMT, US benchmark West Texas Intermediate (WTI) for delivery in February, a new contract, was 26 cents higher at $36.07 a barrel.

The European standard, Brent crude for February, was at $36.57, up 22 cents from its closing level of $36.35 in London on Monday which was the lowest since July 2004.

"This could be positioning ahead of the weekly American reports, which should show rising crude inventories," said Bernard Aw, market strategist at IG in Singapore.

Aw said the narrowing gap between WTI and Brent indicates the market´s belief that US oil inventories could fall because American shale oil producers, who have higher production costs, are being squeezed out by low world crude prices.