Oil rose above $74 a barrel today, extending its rally to trade near a 10-month high, on optimism energy demand will rebound as the US economy heads for a recovery, while a storm off eastern Canada also lent support.
A string of positive economic data from various countries across the globe, combined with a weakened US dollar and rallying stock markets have helped lift oil prices by 9.45 per cent last week -- the highest weekly gain in 13 weeks.
US crude for October delivery rose 20 cents to $74.09 a barrel. The contract settled up 98 cents at $73.89 per barrel on Friday, the highest settlement since October 20th.
London Brent crude gained 46 cents to $74.65.
Oil's Friday gains followed home sales data for July showing recovery in the US housing market, while Federal Reserve Chairman Ben Bernanke also said the global economy appeared to be recovering.
Growing signs of an economic improvement helped to spur risk appetite, prompting Asian stocks to jump more than 2 per cent today, lifting world shares to a 10-month high.
In China, the world's No.2 energy consumer, apparent oil demand rose 3.5 per cent in July from a year earlier -- the fourth rise in a row, Reuters calculations from official data showed.
However, threats to energy facilities have not yet passed. Bill, the first hurricane of the 2009 season, is now heading towards Atlantic Canada -- an energy producing region that exports oil, natural gas and refined products to the US Northeast and elsewhere.
Separately, analysts say renewed tensions in Nigeria could also add further support to oil, should investors' continue their focus on a more bullish outlook.
Investors will watch this week's new home sales and consumer data to see if the economy's recovery is on track and whether US stocks -- now at their 2009 highs -- will extend their rally.
Crude oil speculators on the New York Mercantile Exchange trimmed their net long positions in the week to August 18th, according to data from the Commodity Futures Trading Commission released on Friday.
Reuters