Investing.com - Oil prices edged higher on Tuesday in choppy trading even after a weak Chinese manufacturing gauge and soft U.S. housing numbers stoked demand fears, as perceptions the commodity may be oversold lifted futures into positive territory.
In the New York Mercantile Exchange, West Texas Intermediate crude oil futures for delivery in February traded up 0.32% at $56.44 a barrel during U.S. trading, up from a session low of $53.96 a barrel and off a high of $57.43 a barrel.
The February contract settled down 3.13% at $56.26 a barrel on Monday.
Support for the commodity was seen at $48.01 a barrel, the low from April 27, 2009, and resistance at $65.61 a barrel, last Monday's high.
Concerns that global supply far outstrips demand have battered oil prices during the second half of this year, and data out of China and the U.S. exacerbated those concerns.
The preliminary reading of China’s HSBC manufacturing purchasing managers’ index came in at 49.5, down from a final reading of 50.0 in November and below forecasts of 49.9, which stirred up concerns that demand for fuel and energy in the Asian giant may be cooling.
Meanwhile in the U.S., housing starts fell unexpectedly last month, official data showed on Tuesday.
The Census Bureau reported earlier that the number of housing starts fell to 1.028 million units from 1.045 million in the preceding month whose figure was revised up from 1.009 million.
Analysts had expected the number of housing starts to rise to 1.030 million last month.
Building permits took a similar turn for the worse.
The Census Bureau reported that the number of building permits issued in November fell to 1.035 million from 1.080 million in the preceding month .
Analysts were expecting the number of building permits issued to fall to 1.060 million last month
London-traded Brent prices have fallen nearly 47% since June, when the commodity hit $115.71, while WTI futures are down almost 46% from a peak of $107.50 in June.
Oil prices firmed earlier this year on expectations for a more robust U.S. economy to consume more fuel and energy as well as on geopolitical concerns.
While the U.S. economy continues to expand, other major economies are seeing their growth rates cool, which has softened oil prices.
Furthermore, military conflicts in the Ukraine, Syria, Iraq and elsewhere have not disrupted supply as once feared, which is allowing oil prices to slide further.
Still, by Tuesday afternoon trading, bargain hunters pushed the commodity back into positive territory.
Separately, on the ICE Futures Exchange in London, Brent oil futures for January delivery were down 1.33% at US$60.40 a barrel, while the spread between Brent and U.S. crude contracts stood at $3.96.