Oil prices rose on Tuesday as analysts pointed to signs of US supply tightness, ending days of losses as global markets remain haunted by the potential impact on China's economy of a crisis at heavily indebted property group China Evergrande.
Brent crude gained 52 cents or 0.7% to $74.44 a barrel by 02:12 GMT, having fallen by almost 2% on Monday. The contract for West Texas Intermediate (WTI), which expires later on Tuesday, was up 61 cents or 0.9 at $70.90 after dropping 2.3% in the previous session.
Global utilities are switching to fuel oil due to rising gas and coal prices, and lingering outages from the Gulf of Mexico after Hurricane Ada that imply less supply is available, ANZ analysts said.
"While slowing Chinese economic growth and uncertainty around the (US) Fed's tapering timetable weighed on market sentiment, other developments still point to higher oil prices," ANZ Research said in a note.
Investors across financial assets have been rocked by the fallout from heavily indebted Evergrande and the threat of a wider market shakeout.
The broader state of China's economy is also weighing on markets, while the US Federal Reserve is expected to start tightening monetary policy, which is likely to make investors warier of riskier assets such as oil.