Oil rose above $51 this morning as rallies on stock markets revived thoughts of economic recovery and subsequent increased demand for commodities.
Asian stocks pushed back towards a six-month high today following gains on US markets, while European equities edged higher ahead of the Bank of England's rate decision later today.
US light crude for May delivery rose $1.84 cents to $51.22 a barrel by 9am, having risen more than $2 earlier.
London Brent crude gained $1.59 cents to $53.18. “I think oil is going up with a lot of other markets at the moment, stock markets have risen and base metals are performing well,” said Rob Montefusco, a trader at Sucden Financial.
Oil has often tracked equities this year as investors looked for signs of economic recovery to trigger higher oil demand.
Copper prices hit a 5-month high today after Japan unveiled a record stimulus plan worth $154 billion, adding to thoughts of an increase in demand. Aluminium prices also climbed.
Weekly stocks data from the Energy Information Administration (EIA) in the United States showed a lower than expected build in crude oil stocks yesterday.
Sucden trader Rob Montefusco said: "The data was supportive because we were all anticipating weak numbers and they came pretty much in line, the distillate stocks were also a surprise."
EIA said commercial inventories of crude oil rose 1.7 million barrels to 361.1 million barrels in the week ended April 3. Analysts had forecast a build of 1.9 million barrels.
Distillate stocks fell 3.4 million barrels, much more than the 200,000 barrel draw analysts had projected, to 140.8 million barrels.
Reuters