Oil rose more than $3 per barrel to above $51 today as rising equities markets bolstered sentiment during a G20 summit which investors hoped would deliver measures to restore global growth.
European shares rose sharply on expectations the economic downturn was moderating, with investors training their sights on the G20 leaders' meeting in London.
Asian stocks earlier shot to a three-month high with Tokyo's Nikkei closing up 4.4 per cent.
US light crude oil for May delivery rose to a high of $51.53 per barrel, up $3.14, before slipping back to trade around $51.30 by 1.48pm. London Brent crude was up $3.30 at $51.74 a barrel.
“It's managed to pop back above $50 which could be giving the market a bit of a boost from a technical perspective," said Tony Machacek, oil broker at Bache Commodities in London.
“There seems to be a G20 factor - the stock markets are strong and the dollar is weaker. That is also helping the market.”
Oil has fallen nearly $100 from a record high above $147 in July 2008 as the economic downturn has dented global energy demand, particularly in the United States.
The number of US workers filing new claims for jobless benefits unexpectedly rose to its highest level in over 26 years last week and so-called continued claims jumped to a record high in March, according to Labor Department data.
Initial claims for state unemployment insurance benefits rose 12,000 to a seasonally adjusted 669,000 in the week ended March 28, the highest since the week ending Oct. 2, 1982, from an upwardly revised 657,000 the week before.
The head of the International Energy Agency said today the agency was likely to cut its global oil demand forecasts significantly as more bleak economic data emerged.
“The possibility for downward revision will be high,” Nobuo Tanaka, the agency's executive director, said in an interview on the sidelines of an energy conference.
"We now have data from not only the IMF but the OECD. They all look gloomy. Inevitably, the possible downward revision can be significant but I cannot say how big."
The euro jumped against the dollar today after the European Central Bank cut interest rates by a smaller-than-expected 25 basis points to 1.25 per cent. Markets had expected a 50 basis point cut.
Reuters