American Petroleum Institute will report supply data at 4:30 p.m. Eastern By Claudia Assis & Polya Lesova, MarketWatch SAN FRANCISCO (MarketWatch) -- Oil futures rose on Tuesday, on a rebound as investors bet that crude's recent declines may have been overdone and prospects for Europe improved. Crude oil for June delivery gained $1.89, or 2.7%, to $71.98 a barrel on the New York Mercantile Exchange, snapping a losing streak of five consecutive sessions. The front-month contract hit an intraday high of $72.43 a barrel. "We're seeing some stabilization in the financial markets," said Carl Larry, president of Oil Outlooks & Opinions in Houston, Texas. "It has been an oversold market, there was a lot of panic about Greece and the euro zone." Fears cleared up a bit for the euro zone as Greece said that it received 14.5 billion euros in loans from the European Commission and that its short-term financing needs are covered. The money, together with 5.5 billion euros Greece already received from the International Monetary Fund, will cover the nation's immediate and short-term financing needs. The euro (CUR_EURUSD 1.2366, -0.0029, -0.2340%) edged up to $1.2417. The dollar index (DXY 86.33, +0.12, +0.14%) , which compares the U.S. unit to a basket of six currencies, stood at 86.12, down from 86.24 late Monday. Oil gains also came as U.S. stocks opened higher and data showed that housing starts increased for the second straight month in April to an 18-month high. However, building permits fell 11.5%, the lowest in six months. Oil prices dropped 2.1% on Monday to end at a five-month low, as worries escalated that Europe's sovereign debt problems would slow down the global economic recovery and lead to a decline in energy demand. "The markets continue to underestimate the strength of the macroeconomic data and overestimate the transmission from the European sovereign crisis into growth, but buying this dip carries more risk than in February as we have already seen the policy response," wrote analysts at Goldman Sachs in a note to clients. Oil futures have also been under pressure because of rising inventories at Cushing, Okla., the delivery point for futures traded on the New York Mercantile Exchange. "As we expect refinery runs to continue to increase, we remain confident that the situation in Cushing should reverse over the coming weeks," the Goldman analysts said. The American Petroleum Institute will report supply data at 4:30 p.m. Eastern time. Analysts polled by Platts expect a rise of 950,000 barrels in crude supplies and a build-up of 940,000 barrels in distillate stocks. Gasoline stocks are projected to have declined by 450,000 barrels. Refinery operations likely edged down by 0.11 percentage point to 88.29%. The U.S. Energy Information Administration will release its more closely watched inventory data on Wednesday morning.

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