Oil futures climbed to a seven-week high Monday amid optimism over the U.S. economic recovery and the prospect of rising crude demand this summer.
Light, sweet crude for June delivery settled higher by 69 cents, or 0.7%, at $96.71 a barrel on the New York Mercantile Exchange. That's the highest settlement for the front-month Nymex contract since April 2.
Brent crude on the ICE futures exchange recently settled higher by 16 cents, or 0.2%, at $104.80 a barrel, the highest settlement since May 6.
Monday marked the fourth straight session of higher crude prices in a rally fueled largely by surging equities and broader optimism about the U.S. economy.
With no economic data released Monday, traders were looking ahead to an update on U.S. oil inventories and testimony by Federal Reserve Chairman Ben Bernanke on Wednesday.
"You've got talk of a stronger recovery ... and we've got a holiday weekend coming up," said Carl Larry, head of Oil Outlooks and Opinions. "You're going to see stronger demand for oil across the board."
This weekend's Memorial Day holiday typically marks the start of the summer driving season in the U.S., when gasoline demand generally peaks and oil prices often rise.
Mr. Bernanke's testimony will be of particular interest to oil-market participants, who will be looking for clues that the Fed plans to wind down its long-running stimulus program. The program is widely viewed as eroding the dollar, which typically boosts oil prices by making the dollar-denominated commodity cheaper for holders of other currencies.
Federal Reserve Bank of Dallas President Richard Fisher, who does not vote on monetary policy, said in an interview with CNBC that he favored slowing asset purchases. The greenback on Monday was weaker against the euro and the yen, but has surged in recent weeks.
Wednesday will also bring U.S. oil inventory data, with early estimates from analysts calling for flat oil stockpiles compared with last week. Stockpiles are currently near their highest level on record, although late spring is typically when stockpiles start to decline as refineries ramp up operations.
Last week, the Energy Information Administration reported U.S. gasoline demand was at a two-month low during the week ended May 10.
Front-month June reformulated gasoline blendstock, or RBOB, settled 0.13 cent lower at $2.9056 a gallon. June heating oil settled 1.38 cents, or 0.5%, to $2.9508 a gallon.
Copyright (c) 2012 Dow Jones & Company, Inc.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.