* Bank of Japan pledges aggressive actions to boost economy
* RBOB gasoline futures rise on heavy U.S. refinery
* Coming up: Weekly US inventory data from the API on
(Updates throughout, adds settlement prices)
By Robert Gibbons and Gabriel Debenedetti
NEW YORK, Jan 22 Oil prices rose on Tuesday,
supported by Bank of Japan plans for asset buying and strong
investor confidence data from Germany that boosted the outlook
for fuel demand.
News that the Bank of Japan would switch to an open-ended
commitment to buying assets next year and double its inflation
target to help end years of economic stagnation gave crude an
Optimism increased following a surprisingly strong German
ZEW reading on investor sentiment, a sign the euro zone crisis
was no longer hitting Europe's largest economy as hard as it did
Further support came from gains in the U.S. stock market
after the Dow and the Standard & Poor's 500 indexes closed at
five-year highs on Friday.
"I think there is a wider risk on trade flow, with stock
markets positive, Bank of Japan policy shift, and the German
investor confidence," said Tim Evans, energy analyst for Citi
"Those got us started higher earlier in the day and we've
kind of built on those gains as the session's gone on."
RBOB gasoline futures led the oil complex higher,
gaining more than 1 percent, on expectations a heavy Spring
maintenance season would tighten supplies.
Brent March crude rose 71 cents to settle at $112.42
a barrel. The U.S. February crude contract, which expired
at the settlement, gained 68 cents to settle at $96.24 a barrel.
The more heavily traded March crude rose 64 cents to
settle at $96.68 a barrel.
Brent trading volumes were heavy, up 17 percent over the
30-day moving average at the close, while U.S. volumes were
closer to normal levels.
Brent's premium to U.S. crude narrowed slightly to $15.77 a
barrel, following news the governor of Nebraska had approved a
revised route for the Keystone XL pipeline that would send
Canadian crude to refineries in Texas and help clear growing
inventories of crude in the Midwest that has depressed U.S. oil
The U.S. State Department is expected release its own
environmental assessment of the $5.3 billion project soon, a
step it must take before deciding the fate of the pipeline in
the months ahead.
Goldman Sachs said in a research not that the expanded
pipeline flows aimed at easing the bottleneck of crude in the
Midwest by shipping it to the Gulf Coast refining hub cause
another glut of crude to emerge in that region.
U.S. financial markets were closed on Monday for a holiday,
with trading on electronic platforms being done for a Tuesday
trade date. Weekly U.S. inventory data from the American
Petroleum Institute was delayed by one day to Wednesday by the
holiday, while the U.S. Energy Information Administration's
report will be released on Thursday.
The data is expected to show builds in U.S. crude, gasoline
and distillate inventories, according to a Reuters poll of
(Reporting by Robert Gibbons in New York, Peg Mackey in London
and Florence Tan in Singapore; Editing by Bob Burgdorfer and