Oil rose above $60 a barrel this morning, supported by data showing a fall in petrol stocks and after strong company earnings lifted expectations for economic recovery.
US crude for August delivery rose 87 cents to $60.39 a barrel by 10.30am and Brent rose $1.08 to $61.94.
The US contract settled at $59.52 a barrel yesterday, adding to a decline that shaved 11 per cent from the price last week in the steepest weekly fall since January.
European and Asian equities rallied on Wednesday, tracking gains on US markets after upbeat results from Goldman Sachs and Intel, but doubts lingered about the strength of any rebound and the implications for energy demand.
“The financial factors are lifting oil prices,” said Carsten Fritsch, oil analyst at Commerzbank. “But they are not driven by strong fundamentals (of supply and demand).”
Weak demand for oil has generated big stockpiles and US motor fuel stocks have risen even though the summer driving season is well under way.
Distillate stocks, including diesel, are at their highest for nearly 25 years.
The oil market got a boost from a report by industry body the American Petroleum Institute late last night, which showed a drop in petrol stocks, as well as in crude inventories.
But traders will be waiting to see whether US government data for release at 3.30pm will provide confirmation.
A Reuters survey of analysts predicted the figures would show rises in distillate and gasoline stockpiles and a fall in unrefined crude.
Reuters