Oil prices have hit their highest level in nearly two weeks, lifted by a global equity market recovery and tensions in the Middle East, although concerns of rising US production tempered gains.
European shares rose for a fourth straight session, with global stocks set for a sixth session of gains, following a sell-off triggered by fears of creeping inflation and higher borrowing costs.
Brent crude was up 89 cents at $US65.73 a barrel at 1802 Monday GMT (0502 Tuesday AEDT), after rising to an 11-day high of $US65.75 a barrel earlier in the session.
US West Texas Intermediate crude for March delivery was up 82 cents at $US62.50 a barrel, after earlier gaining as much as 1.44 per cent to its highest since February 7.
‘Benign stock markets are providing … as are geopolitical tensions in the Middle East,’ Commerzbank said in a note.
Israeli Prime Minister Benjamin Netanyahu said on Sunday that Israel could act against Iran itself, not just its allies in the Middle East, after border incidents in Syria brought the Middle East foes closer to direct confrontation.
Trading is expected to be slower than usual on Monday due to market holidays in the United States and Greater China.
The US oil rig count, an indicator of future production, rose by seven to 798, its highest since April 2015, according to a weekly report from General Electric’s Baker Hughes unit.
That marked the first time since June that drillers added rigs for four consecutive weeks, and the figure was well up on the 597 rigs that were active a year earlier as energy companies have boosted spending since mid-2016 when crude prices began recovering from a two-year crash.
Surging US production is offsetting efforts by the Organization of the Petroleum Exporting Countries (OPEC) and some other producers including Russia to curb production by 1.8 million barrels per day (bpd) until the end of 2018.
Money managers slashed their bullish bets on Brent crude futures by the most in nearly eight months in the week to February 13, InterContinental Exchange data showed.
Speculators also cut net long US crude futures and options positions in the week to February. 13 by the most since late August, the US Commodity Futures Trading Commission (CFTC) said.
Oil pricing agency Platts is looking at adding new oil production from the Johan Sverdrup oilfield to its global dated Brent crude benchmark, to ensure liquidity is maintained.