Updated from 10:47 a.m. EDT

Oil prices edged higher Tuesday, one day ahead of the government's weekly inventory report that is projected to show a 10th consecutive build in distillate stocks. Several energy companies also reported improved earnings.

Crude for September delivery closed up 20 cents to $59.20 on Nymex. Gasoline futures were little changed at $1.70 a gallon.

The Energy Department is expected to say Wednesday that inventories of distillate fuels, which include heating oil and diesel, rose by 1.7 million barrels during the week ended July 22. Crude inventories probably fell by as much as 900,000 barrels, analysts say.

Meanwhile, Congress is nearing an agreement on a bill that could provide $10 billion in tax breaks to domestic energy producers and double the use of corn-based ethanol in gasoline to 7.5 billion gallons a year by 2012. The bill's final version is expected to be approved by the end of this week.

The legislation was initiated by the Bush administration as a way to reduce America's dependence on foreign energy sources. The country now uses about 20 million barrels of oil daily, with imports making up about half of that. An initiative to drill in Alaska's National Wildlife Refuge, a prospect that some estimates say would increase domestic production by 1 million barrels a day, was dropped by the House over the objections of environmentalists.

As for U.S. gas and oil companies, second-quarter earnings continue to be strong, with Tuesday's heavy-hitters


(BP) - Get Report



(VLO) - Get Report

reporting profit increases of 29% and 34%, respectively.

Offshore driller

Ensco International


reported second-quarter net income of $70 million, or 46 cents a share, on revenue of $248.6 million. The company earned $17.5 million, or 12 cents a share, on revenue of $170.9 million in the same period a year ago. This year's results were driven by higher day rates and increased utilization of its rigs. Earnings include a gain of 7 cents a share from discontinued operations and a charge of 1 cent a share for debt prepayment. Analysts on average estimated earnings of 36 cents a share, according to Thomson Financial.

Ensco said the average day rate for its jackup-rig fleet was $65,400, compared with $51,300 in the prior-year quarter. Shares dropped 0.9% to $38.69.


(UNT) - Get Report

, which produces natural gas in the U.S., said second-quarter earnings rose 96% from last year, to a quarterly record. Net income was $39.6 million, or 86 cents a share, on revenue of $189.9 million, driven by increases in drilling rigs use, dayrates, production and realized prices. Unit shares rose 0.5% to $46.10.

As for

BJ Services

( BJS), earnings for its fiscal third quarter ended June 30 were $114.2 million, or 70 cents a share, down from $129.3 million, or 79 cents a share, in the same period last year, but they still beat Wall Street's expectations by 10 cents. The equipment and service provider to the oil and gas industry said that its fiscal fourth-quarter results would range between 80 and 82 cents a share, higher than the average estimate of 72 cents a share in that quarter, according to the Thomson Financial poll. Shares rose 80 cents, or 1.4%, to $59.23.

Shares of

Delta Petroleum

( DPTR) rose after the independent exploration and production company pegged June-quarter production at about 4 billion cubic feet equivalent, which is 11% less than research firm Raymond James expected. It also estimated that proved reserves are around 220 to 225 billion cubic feet equivalents for the quarter, which represents 31% to 34% year-over-year growth, according to Raymond James.

"Although we are modestly disappointed in the slower-than-expected ramp-up in production, we believe Delta's large acreage positions ... hold significant long-term growth potential," Raymond James said in a note. Delta's shares increased 38 cents, or 2.4%, to $17.

Despite reporting better-than-expected second-quarter results, shares of

NS Group

(NSS) - Get Report

fell more than 7% after it said net income of $37.2 million, or $1.65 a share, benefited from a reduction in valuation allowances against certain deferred tax assets. Still, earnings doubled from last year and beat analysts' consensus by more than 20 cents a share.

Among the major oil producers, shares were mostly down.

Exxon Mobil

(XOM) - Get Report

dropped 0.5%,


(CVX) - Get Report

fell 0.7%,


(COP) - Get Report

lost 0.7%,

Royal Dutch/Shell

( RD) fell 0.3% and BP dropped 1.7%.