On the New York Mercantile Exchange (NYMEX), oil for June delivery ended 15 cents higher at $17.81, recovering part of the 52-cent loss sustained last Friday and on Monday.

Unleaded gasoline for May delivery on the NYMEX settled on Tuesday at 52.60 cents a gallon, up 0.21 cent from Monday, and May heating oil also rose, ending at 43.05 cents a gallon, up 0.31 cent on the day.

In the stock markets, prices rose despite lower first- quarter earnings reported by Texaco Inc., the nation's fourth-largest oil company, and two of its smaller rivals, Phillips Petroleum Co, and Conoco Inc.

Texaco, based in White Plains, said its first-quarter net income fell 15 per cent, battered by low oil prices in the period. Texaco's net income dropped to $199 million, or 35 cents per diluted share, from $234 million, or 42 cents a share, in theyear-ago first quarter.

Okla-based Phillips said its net income fell 71 per cent to $70 million, or 28 cents per diluted share, on revenues of $2.5 billion.

Conoco, the Houston-based company being spun off from DuPont Co., said its net income fell to $83 million, or 13 cents a diluted share, from $240 million, or 38 cents a share, last year on a pro forma basis. DuPont sold 30 per cent of Conoco to the public last autumn in a $4.4 billion initial public offering, the largest in US history.

But the chief executives of all three companies said recent improvement in oil prices was encouraging, putting them on a better footing to reap benefits in the quarters ahead.

"Fortunately, prices have recently strengthened, which is a very positive signal for the rest of the year," Texaco's chairman and chief executive officer Peter Bijur said.

Wayne Allen, chairman and CEO of Phillips, said his company expected stronger financial results in the second quarter as a result of expanded volumes, a cost-reductionprogramme and improved prices and margins.

Conoco president and CEO Archie Dunham said recent recovery in prices was "very encouraging," after the sharp fall in crude oil, natural gas andproduct prices hurt Conoco severely in the first quarter.

Share prices of the three companies rose, as did those of the nation's oil majors, reversing a fall on Monday, as investors were buoyed by hopes of better days ahead for the oil industry. The gains also reflected another record rise in the Dow Jones industrials average, which shot up 113.12 points, or 1.06 per cent, to settle Tuesday at 10,831.71.

The shares of the nation's other leading oil companies also finished higher. Exxon Corp rose 56.25 cents to $78.25; Mobil Corp added $1.4375 to $99.125; Chevron Corp, gained $3.50 to $98.9375, and Atlantic Richfield climbed $2.75 to $82.625, all in composite New York Stock Exchange trading.

Bucking the trend of disappointing earnings from the major integrated oil companies, Ultramar Diamond Shamrock Corp., one of thenation's largest independent refiners, surpassed Wall Street's expectations and reported it earned first-quarter net income of $16 million, or 18 cents per diluted share, on revenues of $2.8 billion. Wall Street had estimated a first-quarter loss of three cents per share.