Oil rises to $69 on optimism of global economic recovery
U.S. crude for September delivery rose 50 cents to $68.55 a barrel by 0116 GMT. The contract settled up 89 cents at $68.05 a barrel on Friday, the highest settlement since July 1.
London Brent crude rose 48 cents to $70.80.
“Oil’s rally has again been supported by external factors, such as positive macroeconomic data and rally in the equities markets, and those factors, along with the U.S. dollar, should again set the tone for oil this week,” said Toby Hassall, a commodities analyst at Commodities Warrants Australia.
“But considering how actual demand in the U.S is still quite weak, I think there is a downside risk for oil prices.”
Major stock indices rose in early Asian trade, but some investors were reluctant to commit new cash ahead of the August earnings season.
Oil prices jumped about 7.2 percent last week, adding on to gains of around 6 percent the previous week, amid hopes for a rebound in the economy.
But Wall Street may take a breather this week after an earnings driven rally lifted the major U.S. stock indices to their highest levels in months.
Some analysts said a faster rebound in Asian economies, led by China, would offer further support for oil prices in coming months.
“The central factor in determining the speed of adjustment in oil products will be the pace of recovery in Asia,” Barclays Capital said in a research note.
“The sensitivity of oil demand to economic growth is greater in Asia than in other regions, and the tendency for economic growth to surprise consensus estimates on the upside also appears to be greater in Asia.”
Separately, on the geopolitical front, more than 50 Nigerians were killed on Sunday in clashes between security forces and militants in the northeastern city of Bauchi, residents and hospital sources said.
U.S. Secretary of State Hillary Clinton said on Sunday that Iran would not be allowed to have a nuclear weapon and reiterated Washington’s commitment to protect close ally Israel from any threat posed by Iran.
Crude oil speculators on the New York Mercantile Exchange cut their net long positions in the week to July 21 as prices rose, data from the Commodity Futures Trading Commission showed.