Oil rose towards $72 a barrel today, extending its gains of a day earlier on bullish US economic data and supply concerns in OPEC member Nigeria.
Reflecting fresh optimism for an economic turnaround, Asian equity markets snapped four days of losses, following a rally on Wall Street, where the Dow and S&P 500 broke a three-day losing streak following positive job and regional manufacturing reports.
US crude rose 28 cents to $71.65 a barrel by 5.36am, and London Brent crude gained 23 cents to $71.29.
“Prices are trailing a bit from yesterday's upward movement. The US data gave people reason for hope that a rebound in the United States may soon arrive," said Ben Westmore, a commodities analyst at National Australia Bank.
The reading on the Philadelphia Federal Reserve business activity index was the highest since September 2008, and the Conference Board's forward-looking measure of the US economy posted its biggest increase in five years in May.
On jobs, the number of US workers filing new claims for jobless benefits rose last week, but the number of people staying on the benefits rolls fell for the first time since January, data showed yesterday.
The MSCI index of Asia-Pacific shares outside Japan climbed 0.9 per cent by 6.37am, while Japan's Nikkei average rose 0.5 per cent.
A weaker dollar, which makes commodities cheaper for holders of other currencies, also helped crude prices.
Oil prices have nearly doubled since February on signs of a potential economic recovery but the pace of the rally has also sparked concerns that prices do not fully reflect improvements in oil fundamentals, and costly crude may hurt any nascent recovery.
President Barack Obama remains concerned about speculation in the oil markets even though he has not proposed concrete steps to rein it in, White House spokesman Robert Gibbs said yesterday.
Reuters