Oil prices climbed back near $82 on Tuesday as the Federal Reserve said again that it will hold interest rates at record lows as the economy continues to recover, dpa reported.
Benchmark crude for April delivery rose $1.90 to settle at $81.70 on the New York Mercantile Exchange.
The stock market inched higher, reassured by the Fed's steady-as-she-goes approach and its view that the economy appeared to be stabilizing, although it was not fully recovered.
Earlier in the day, the Commerce Department said that construction of new homes and apartments fell 5.9 percent in February to a seasonally adjusted annual rate of 575,000 units.
The weak housing report "puts less pressure on the Fed to raise interest rates," said PFGBest Research Analyst Phil Flynn.
"The Fed has at least the perception of more wiggle room, and that puts downward pressure on the dollar and upward pressure on crude."
The dollar continued its decline in afternoon trading, making dollar-denominated crude cheaper for holders of foreign currencies.
Oil prices have swung between $70 and $85 for the better part of six months as global crude demand slowly recovers from the Great Recession but remains weak in developed countries.
"We have shifted from a bullish to a bearish trading posture," Ritterbusch and Associates said in a report. "We will look for a resumption of selling by midweek."
Saudi Arabia's oil minister said Tuesday that he expects OPEC to keep output steady for the rest of this year. Ministers of the 12-nation group meet Wednesday in Vienna.
Retail gasoline prices fell Tuesday. The nationwide average dropped 3 cents to $2.787 per gallon according to AAA, Wright Express and Oil Price Information Service.
Gasoline prices have risen 16.7 cents in the last month and are now 87.7 cents higher than levels of a year ago.
In other Nymex trading in April contracts, heating oil rose 5.67 cents to settle at $2.1143 a gallon, and gasoline added 5.22 cents to close at $2.275 a gallon. Natural gas fell 4.4 cents to settle at $4.347 per 1,000 cubic feet. Earlier, it hit a 52-week low of $4.323.
In London, Brent crude rose $1.13 to settle at $79.02 on the ICE futures exchange.