Oil was steady above $42 a barrel today, after surging more than 6 per cent overnight on US government data that showed a larger-than-expected drop in gasoline stocks.
The market will eye US January durable goods orders and weekly jobless claims - due later yesterday and likely to reflect slumping business investment and rising unemployment - for further clues on the state of the world's largest economy and top oil consumer.
US crude for April delivery was up 25 cents to $42.75 a barrel by 2.20am, after rising $2.54 yesterday. London Brent crude gained 26 cents to $44.55.
Oil's gains were spurred by US Energy Information Administration data showing gasoline stocks fell 3.4 million barrels, against a forecast for just a 100,000-barrel draw.
"Inventories in the US have gone down for two weeks in a row - it looks like the worst is probably over as far as the US is concerned, but it's really the economy, the economy, the economy," said Anthony Nunan, risk management executive at Tokyo-based Mitsubishi.
The data also showed a 1.7 per cent rise in US gasoline demand over the four weeks ending February 20th, as low gasoline prices lured US motorists back on the roads.
This helped oil shrug off a drop in equities markets, with European shares hitting a new six-year low.
US stocks also fell after US President Barack Obama's first address to Congress shed little new light on how he plans to stabilise the economy and shore up banks.
Data showing sales of previously owned US homes plunged in January and prices hit a six-year low also weighed on shares.
Looking ahead, the US Labor Department will release jobless claims for the week ended February 21st, and the US Commerce Department will also unveil January durable goods orders, both at 1.30pm.
Reuters