LONDON: Oil rose above $107 a barrel on Monday, continuing a rally sparked by the United States rescue plan for its financial sector.
Sweeping government measures to rescue the financial system and restore confidence in shaky markets spurred a huge relief rally across markets on Friday, when oil rose almost 7 percent to cap its biggest three-day rally in a decade.
US crude for October delivery, which expires Monday rose $3.18 to $107.73 a barrel by 1037 GMT, rebounding from earlier losses of as much as $1.20 which analysts attributed to worries about the workings of the rescue plan.
The contract jumped $6.67 to settle at $104.55 a barrel on Friday, bringing gains since Wednesday to 14.7 percent – the biggest three-day rise since December 1998.
London Brent crude traded up $4.39 to $104.00.
I think oil is still following the financial markets. After the rescue package on Friday the outlook is more optimistic, said Simon Wardell, analyst for Global Insight in London.
Oil prices have tumbled from record highs over $147 a barrel struck in mid-July, pressured by mounting evidence that high energy costs and economic woes are undercutting global fuel consumption.
Last week, turmoil in the US financial sector helped push oil to a seven-month low of $90.51 a barrel.
Oil prices were also supported on Monday by news China increased crude imports 11.54 percent in August compared with a year earlier, recovering from a steep July fall, the General Administration of Customs said on Friday, confirming earlier data.
The Chinese import news is a sign of recovery, and a good indication that oil prices could get back up again. said Christopher Bellew of Bache Financial
Industry sources also said on Monday that top oil exporter Saudi Arabia has trimmed oil supplies to international majors and US refiners since the start of September.
However, oil s rise on Monday was limited by news that Nigeria s main militant group had begun a unilateral ceasefire on Sunday after a week of clashes with the military and attacks on oil installations which cut output in Africa s top producer.
