LONDON (SHARECAST) - Crude oil prices soared on Tuesday as investors cheered China's decision to inject around $42bn of liquidity, via reverse repurchase agreements, in a bid to boost growth.
Oil for November delivery rallied $3.06 or 3.4% to settle at $92.39 a barrel on the New York Mercantile Exchange, the highest settlement in a week.
Concern about tensions in the Middle East, in particular between Syria and Turkey, also brought buyers back on board. There is concern that unrest in Syria may trickle into neighbouring countries in the oil rich region and disrupt global oil supplies. Growing tensions surrounding Iran's nuclear programme also sparked market jitters.
Tuesday's oil gains came despite the International Monetary Fund's warning that global recovery was weakening. The IMF said that the risk of further deterioration in the economic outlook was "considerable" as it lowered growth forecasts for China and Japan, as well as many other economies.
Elsewhere November gasoline futures rose 7 cents to $2.96 a gallon.
Among precious metals gold lost its shine on Tuesday, after a choppy session, amid a lacklustre performance among equities and as the dollar strengthened against major currencies.
Gold for December delivery dropped $10.70 to $1,765 an ounce on the Comex division of the New York Mercantile Exchange.
January platinum futures fell $3.50 to $1,695.30 an ounce and palladium for December delivery added $1.25 to $658.20 an ounce.