Oil prices climbed Tuesday as U.S. stocks extended gains on increased optimism about the economy.
U.S. stocks continued to move higher on Tuesday on track for a four-day winning streak, after the largest U.S. aluminum producer Alcoa reported better-than-expected earning.
Strong equity markets also boosted oil prices, as traders believed that U.S. economy is improving.
Total U.S. nonfarm payroll employment increased by 195,000 in June, and the unemployment rate was unchanged at 7.6 percent, the U.S. Labor Department said last Friday.
The International Monetary Fund (IMF) on Tuesday cut its growth forecast for the world economy to 3.1 percent in 2013, 0.2 percentage points lower than its April projection, due to a slower expansion in several key emerging economies.
Traders are watching closely the situation in Egypt. Things are relatively quiet at the Suez Canal, and the shipping is not interrupted.
On the economic front, the U.S. small-business optimism remained in tepid territory in June, as the National Federation of Independent Business's monthly economic index dropped 0.9 to 93.5 after two months of rises, effectively ending any hope of a revival in confidence among job creators.
Light, sweet crude for August delivery gained 39 cents, to settle at 103.53 dollars a barrel on the New York Mercantile Exchange.
Brent for August delivery went up 38 cents, to close at 107.81 dollars a barrel.