Investing.com -- U.S. crude rose moderately after paring earlier gains late in the session, amid signs of weakening demand in Asia and a tighter spread with brent futures before October contracts expired at the end of trading on Tuesday.
On the New York Mercantile Exchange, WTI crude for October delivery wavered between $43.92 and $45.03 a barrel, before settling at 44.61, up 0.62 or 1.42% on the session. Bolstered by a rally in U.S. equity markets, Texas Long Sweet futures surged by more than 2% early in the session before falling back considerably in U.S. afternoon trading. U.S. crude futures are still down by more than 10% this month after opening September above $48 a barrel. Following a three-day rally of 27% to end a volatile month of trading in August, WTI crude plunged by 7.70% on Sept. 1.
On the Intercontinental Exchange (ICE), brent crude for November delivery traded in a tight range between $47.02 and $47.95 a barrel, before closing at $47.84, up 0.49 or 1.05% on the day. One session earlier, brent fell nearly 4% to $46.26, its lowest level in more than two weeks.
With October contracts for North Sea brent futures set to expire as the front-month at Tuesday's settlement, the spread between the international and U.S. benchmarks of crude continued to tighten. At one point during Tuesday's session, the spread between the October contracts fell to $1.31, its lowest level since January.
Meanwhile, trading remained light ahead of the release of the American Petroleum Institute's weekly crude inventory report on Tuesday after the bell. Last week, both the API and the U.S. Energy Information Administration reported a build in excess of 2 million barrels per day.
In addition, Genscape, Inc. a leading provider of energy data for global commodity markets, reported that inventories at the Cushing Oil Hub, the main delivery point for NYMEX oil, increased by 1.8 million barrels per day for the week ending on Sept. 11. The bullish data could provide signals that long-term crude prices might be ready to rebound.
Elsewhere, the Shanghai Composite Index fell by more than 3.5% in overnight trading, suffering its sharpest one-day loss in three weeks. After surging by approximately 150% in a 12-month period, Chinese equities have plunged by roughly 40% from its mid-June highs, amid slowing growth forecasts and liquidity concerns. China is the world's second-largest consumer of oil behind the U.S.. In July, Chinese oil import surged more than 30% to its highest monthly level on record.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, surged more than 0.35% to an intraday high of 95.85, before falling slightly back to 95.75 in U.S. afternoon trading. On Monday, the index fell to near September lows of 95.29. Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.