Oil prices climbed above $85 a barrel in Asia as growing investor optimism about the US economy boosted equity and commodity prices.
Benchmark crude for May delivery was up 44 cents to $85.56 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.42 to settle at $85.12 on Friday.
Oil prices have bobbed around $85 a barrel for about three weeks, holding gains after a jump from $69 in February amid signs the US economy is improving.
The Dow Jones industrial average rose 0.6 per cent Friday, and most Asian stock indices gained on Monday, led by a 2.3 per cent jump in Japan and an advance of 1.7 per cent in Hong Kong.
Oil traders often look to equity markets as a barometre of overall investor sentiment.
“The economic health of the US is getting better,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.
“The positive economic data has supported the increasing confidence among investors, and that’s bullish for oil.”
Despite growing corporate earnings, the unemployment rate remains high and US crude demand hasn’t yet recovered strongly.
“Crude inventories are still very high,” Shum said. “Oil prices would be a lot lower than $85 if you worried about fundamentals.”
In other Nymex trading in May contracts, heating oil rose 1.30 cents to $2.264 a gallon, and petrol increased 1.24 cents to $2.366 a gallon. Natural gas jumped 5.0 cents to $4.307 per 1,000 cubic feet.
In London, Brent crude was up 30 cents at $87.55 on the ICE futures exchange.