LONDON (ShareCast) - Crude oil futures settled higher on Tuesday, rising above $84 a barrel in early afternoon trading following a surprisingly upbeat report on the US service sector.

Crude for July delivery settled up 31 cents at $84.29 a barrel on the New York Mercantile Exchange after Monday's 0.9% advance. Crude plunged more than 6% last week on concern about Europe's debt crisis and recently disappointing US data.

On the ICE Futures exchange, Brent crude fell one cent to $98.84 a barrel.

In US economic news, the Institute for Supply Management said its services index nudged up to 53.7% in May from 53.5% in April. Most economists had expected no change.

Tuesday's gains however were restrained by fears about Europe ongoing debt crisis. G7 finance ministers and central bankers vowed to monitor developments in Europe closely. Meanwhile, Japanese finance minister Jun Azumi said G-7 officials had agreed to co-operate to help resolve debt problems in Spain and Greece.

Trading was also subdued ahead of weekly stockpile data later Tuesday by the American Petroleum Institute and Wednesday's more widely watched Energy Information Administration data.

Among precious metals gold futures settled higher on Tuesday but gains were limited as headlines on Europe dried up and as the dollar remained firm.

Gold for August delivery rose $3 to settle at $1,616.90 an ounce on the Comex division of the New York Mercantile Exchange.

There was also some caution ahead of Wednesday’s European Central Bank meeting. The central bank is widely expected to keep rates on hold however an increasing number of economists believe the worsening debt crisis and recent weak data could spark a rate cut or further refinancing operations.



CJ

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