Investing.com - West Texas Intermediate oil futures bounced off the lowest level in more than six years on Tuesday to trade modestly higher after data showing that U.S. housing starts rose to an almost eight-year high in July.
Crude oil for delivery in October on the New York Mercantile Exchange tacked on 31 cents, or 0.73%, to trade at $42.72 a barrel during U.S. morning hours after falling to a session low of $41.43, the weakest level since March 2009.
The Commerce Department reported that housing starts rose 0.2% to an annual pace of 1.21 million units, the highest level since October 2007. It was the fourth straight month that housing starts remained above a one million-unit rate.
Building permits fell 16.3% in July, but that was after three consecutive months of strong gains.
Market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report Tuesday, while Wednesday’s government report could show crude stockpiles fell by 1.6 million barrels in the week ended August 14.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for October delivery hit an intraday low of $48.25 a barrel, the lowest level since January 14, before trading at $48.50, down 24 cents, or 0.5%, as steep declines on China's stock market rattled investors' confidence.
The Shanghai Composite tumbled 6% in volatile trade on Tuesday, with losses accelerating towards the end of the session despite fresh efforts by the government to calm the market.
China’s central bank injected the largest amount of cash into the financial system on a single-day basis in almost 19 months in an effort to offset outflows in the wake of a weaker yuan.
Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for oil will decline.
Worries that China’s recent devaluation of the yuan will slow down the country’s import of oil also weighed.
The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $5.78 a barrel, compared to $6.87 by close of trade on Monday.