Oil recovers from earlier losses
Stocks revive a six-week rally. Softer dollar and contract expiration also factor.
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| Click the chart for current oil prices. |
NEW YORK (CNNMoney.com) -- Oil prices rose Tuesday, recovering from earlier losses on its expiration day, as stock prices headed higher.
Crude prices rose 63 cents to settle at $46.51 a barrel Tuesday. Oil for June delivery, which becomes the active contract when May expires Tuesday, was up 19 cents to $48.70 a barrel.
Trading is often volatile in the days leading up to the expiration of monthly futures contracts, as investors not wishing to take delivery of physical oil roll positions into the front-month contract.
Meanwhile, stocks turned higher in afternoon trading as investors looked past dour corporate results and tried to revive a six-week market advance.
Many oil traders view the stock market as a proxy for the overall economy and, as a result, oil prices often rise and fall in tandem with the major indexes.
Oil tumbled nearly 9% in the previous session as the Dow suffered its worst decline in 7 weeks on concerns about the health of the banking sector.
Oil also responded to a weaker dollar Tuesday. The contract is priced in dollars, and a less robust greenback makes crude a more attractive investment, particularly for overseas investors.
Tuesday's advance came against a backdrop of weak demand for petroleum products and rising inventory levels as the economy sputters. Oil prices have plummeted more than $100 a barrel since last summer's all-time high.
"Demand has been very weak and U.S. inventories are high," said Tom Pawlicki, energy analyst at MF Global in Chicago, in a research report. "Over the next 1-2 weeks...we believe that oil prices will continue to fall." 
