By Neanda Salvaterra

Oil prices rose to a two-week high on Tuesday, as lower-than-expected inventories buoyed market optimism.

Light, sweet crude for March delivery rose 22 cents, or 0.4%, to $61.90 a barrel on the New York Mercantile Exchange, its fourth consecutive session of gains. Brent, the global benchmark, lost 42 cents, or 0.6%, to $65.25 a barrel.

Investors are assessing conflicting U.S. data from last week about surging U.S. shale output coupled with a lower-than-expected build up in U.S. stocks and falling oil inventories at Cushing, Okla., which have declined by nearly 50%, according to analysts at Standard Chartered.

"You still have those low stocks in Cushing supporting WTI. On the other hand, you have stock builds in the U.S. Gulf," said Olivier Jakob, managing director of Petromatrix, an oil research firm in Switzerland.

Meanwhile, refinery maintenance in several regions including Europe is putting a damper on demand for Brent crude causing a divergence of the crude grades.

"There are also some signs of physical pressure in the crude oil market in Europe, partly due to lower crude oil demand due to refinery maintenance," Mr. Jakob said.

Still, oil found support last week after resource-rich Saudi Arabia reaffirmed its partnership with the Organization of the Petroleum Exporting Countries and external producers such as Russia in their efforts to eliminate about 2% of global supply.

Crude prices closed at a one-week high Friday, after having fallen by more than 12% in the first weeks of February, weighed down by concerns of surging U.S. output eclipsing demand as forecast by the International Energy Agency.

OPEC and other analysts have issued differing views from the IEA. Some analysts say that shale may not be enough to meet future demand.

"We are closer to OPEC's numbers," said Paul Horsnell, the head of commodity research at Standard Chartered. "We do see demand exceeding 1.6 million barrels a day for 2018, and we see non-OPEC supply outside North America falling both this year and the next year."

The American Petroleum Institute issues its forecast on the U.S. crude inventory on Wednesday, and the U.S. Energy Administration releases its weekly inventory report on Thursday.

Gasoline futures edged down to $1.7503 a gallon and diesel futures advanced 0.9% to $1.9277 a gallon.

Stephanie Yang contributed to this article

Write to Neanda Salvaterra at neanda.salvaterra@wsj.com

(END) Dow Jones Newswires

February 20, 2018 17:48 ET (22:48 GMT)

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