Oil prices rose for the fifth straight session on Tuesday, after U.S. Federal Reserve Chairman Ben Bernanke left the door open for more monetary stimulus but gave no signal on whether the Fed was closer to such a move.
Trading was choppy and both Brent and U.S. crude bounced back as tensions involving Iran's dispute with the West over Tehran's nuclear program, along with recent North Sea supply interruptions, provided support to oil.
Bernanke repeated the Fed's pledge to act if needed, even while offering no new clues on when or how the central bank might offer extra support to the U.S. economy.
Financial markets had hoped for signs the Fed was moving closer to a third round of bond purchases, also known as quantitative easing or QE3.
"It's post-Bernanke buying because, while he was not explicit about doing something, the door is clearly open," said John Kilduff, partner at Again Capital LLC in New York.
The euro recovered from losses against the U.S. dollar and U.S. stocks pushed higher after both initially fell back when Bernanke's testimony quelled hopes for quick Fed action after recent moves by central banks in China and Europe to bolster a sputtering global economy.
Brent September crude rose 63 cents to settle at $104 a barrel, swinging from $102.77 to $104.75.
U.S. August crude pushed up 79 cents to settle at$89.22 a barrel, having fallen to $87.41 before reaching the $89.46 intraday peak after the initial Bernanke-induced slump.
August crude options expire on Tuesday ahead of the August contract going off the board on Friday.
"The Iranian uncertainty and the North Sea problems are keeping oil supported, but I don't think those factors will last that long," said Mark Waggoner, president at Excel Futures Inc in Bend, Oregon.
Total crude trading volumes for Brent and U.S. futures topped a half million lots traded, but Brent turnover still lagged its 30-day average by 23 percent.
U.S. heating oil futures bounced back up along with crude futures. But U.S. gasoline futures ended nearly a penny lower at $2.8450 a gallon, having retreated after testing above the 200-day moving average of $2.8675.
Returning refinery units expected to improve supply and lower differentials in the New York Harbor market helped keep gasoline futures from rallying back, traders said.
SUPPLY TIGHTNESS
Production problems last week in the Buzzard field and an earlier strike by Norwegian oil workers are expected to push North Sea exports for 12 key grades to a 2012 low in August.
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