Oil futures traded nearly unchanged Tuesday, pausing a day after a brisk rally as they sought further guidance from U.S. stock markets.
Light, sweet crude for October delivery rose 12 cents, or 0.1%, to $87.39 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe traded up 28 cents, or 0.3%, to $112.16 a barrel.
Crude prices fluctuated between positive and negative territory as U.S. stock futures pointed to a lower open. The Dow Jones Industrial Average rose 255 points on Monday, lifting Nymex crude futures more than 2% as traders shrugged off the relatively mild impact of Hurricane Irene.
"It just looks like we're taking a little bit of a breather," said Tom Bentz, a director at BNP Paribas Commodity Futures. "You've had a market that's run up over the last couple of days."
Oil futures in recent weeks have closely mirrored movements in major U.S. equity indices, which many traders have come to see as barometers of sentiment about the broader economy. Cracks in the fragile U.S. recovery have sent both equities and crude prices sliding in recent months, with Nymex futures coming off a high of nearly $115 a barrel in May.
Dow Jones Industrial Average futures recently fell 53 points, or 0.5%, to 11464.
Although oil market participants remained focused on events overseas, including the recovery in Libya and demand growth in emerging markets, economic weakness in the U.S. has weighed on prices given its status as the world's biggest oil consumer. Traders are likely to keep a close eye on U.S. economic readings until they get a clearer sign that the recovery is back on track.
Later Tuesday, the Conference Board will release its reading on August U.S. consumer confidence, while minutes from the Federal Open Market Committee meeting on Aug. 9 are due in the afternoon.
Further cues on the health of the U.S. economy will come Friday, when the Labor Department releases its monthly report on nonfarm payrolls, the most closely watched gauge of U.S. employment strength.
In Libya, traders continued to await hints on when production and exports would restart. On Monday, Libya's rebel-controlled Arabian Gulf Oil Co. said it plans to restart production and exports by the end of September.
"As crude production returns, we would expect the [rebels] to put its export commitments on the fast-track--even at the expense of domestic crude requirements," said JBC Energy, a Vienna-based consultancy, in a research report.
Front-month September reformulated gasoline blendstock, or RBOB, recently traded up 2.36 cents, or 0.8%, to $2.9300 a gallon. September heating oil gained 1.58 cents, or 0.5%, to $3.0260 a gallon.