Crude-oil futures rose 1.6% Monday, helped by gains in stock markets and a falling dollar as traders looked to other markets for signals on the broader economy, and energy demand.
Light, sweet crude-oil futures for June delivery settled $1.50 higher at $94.50 a barrel on the New York Mercantile Exchange, the highest settlement since April 10.
Front-month Brent crude oil on London's ICE futures exchange gained 48 cents to trade at $103.64 a barrel.
Analysts and traders said trading momentum following the 5.7% last week helped boost oil Monday. And the Standard & Poor's 500 rally that aimed at retaking an all-time high spurred confidence about economic growth in the oil market. Crude traders often look to equities as a predictor of investor sentiment on the broader economy.
Several data releases are due later this week, including economic indicators on China and the monthly U.S. jobs report, so oil traders are keeping close watch for any signs that markets are expecting improvements.
"Equities are going higher and the dollar is going lower, that's what gave the boost to WTI," said Tariq Zahir, managing member of oil-trading firm Tyche Capital Advisors, referring to West Texas Intermediate crude-oil futures.
The euro was recently 0.5% higher at $1.3093 compared to Friday. A weaker dollar often boost oil prices by making crude cheaper for buyers using other currencies.
Despite recent gains, U.S. oil futures have fallen 2.8% this month due to a weaker economic outlook, while Brent crude-oil futures have dropped by over 5% during the same period.
The sharper decline in Brent has resulted in the price gap between Brent and Nymex-traded West Texas Intermediate, or WTI, crude oil narrowing to well under $10, the smallest discount since 2011.
Still, some analysts on Monday said they were skeptical that the smaller price gap would persist. JBC Energy said in a research report that supplies in the North Sea Brent market were growing tighter, which should help lift Brent prices relative to WTI.
Additionally, Morgan Stanley said Brent may rebound to $110 to $115 a barrel this summer. If global growth recovers, the bank's analysts said, it could quickly eat into available oil supplies.
Front-month May reformulated gasoline blendstock, or RBOB, settled 0.74 cent lower at $2.8275 a gallon. May heating oil settled 0.05 cent lower at $2.9007 a gallon.
Copyright (c) 2012 Dow Jones & Company, Inc.
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