By Barani Krishnan
NEW YORK (Reuters) - Oil traded steady to higher on Tuesday, buoyed by gains on Wall Street that helped prices rebound after a tumble in the previous session, ahead of an industry report that's expected to show if U.S. crude stockpiles have fallen after weeks of gains.
The American Petroleum Institute (API) will issue its weekly report on U.S. crude inventories after the market's settlement, at 4:30 p.m. EDT (2030 GMT).
A preliminary Reuters poll indicated that U.S. crude stockpiles likely remained flat last week, after four straight weeks of gains.
Even so, market intelligence company Genscape said in an estimate Monday that crude inventories at Cushing, Oklahoma - the key U.S. crude delivery point - fell 1.8 million barrels last week.
The U.S. Energy Information Administration will issue official supply and demand data for last week on Wednesday.
More From This Section
"We're just trading around the edges before tonight's API, in line with the better stock market and predictions of declining U.S. crude production," said John Kilduff, partner at New York energy hedge fund Again Capital.
U.S. crude futures' front-month contract was up 70 cents, or 1.6 percent, at $44.70 a barrel by 11:40 a.m. EDT (1540 GMT).
The front-month in Brent, the global oil benchmark, was up 5 cents at $46.42. Brent settled down $1.77, or almost 4 percent, on Monday.
Wall Street's benchmark S&P 500 index surged 0.8 percent on upbeat U.S. retail sales data for August.
U.S. crude's outperformance versus Brent has narrowed the spread between the two benchmarks to 7-1/2 month lows. The differential fell to as low as $1.53 a barrel on Tuesday, the smallest since Jan. 20, after it settled on Monday at $2.37.
The outlook for U.S. crude improved after positive forecasts this week by the EIA and other influential entities such as the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC).
"The supply-and-demand numbers suggest that the low oil prices are starting to have an impact on U.S. crude oil production growth," said Olivier Jakob, analyst at Petromatrix.
The EIA forecast on Monday that U.S. shale oil output would drop for a sixth straight month in October.
The IEA and OPEC have cut forecasts for non-OPEC and U.S. oil supply, predicting an easing of the global crude glut by next year. [OPEC/M]
"The market remains oversupplied, but the pace of stock builds is moderating," Energy Aspects said in a report. "The Asian demand outlook is not rosy but it is not collapsing either."
(Additional reporting by Alex Lawler and Henning Gloystein; Editing by Bernadette Baum)