LONDON: US crude futures hit an 18-month high on Monday, climbing towards $86 per barrel on expectations of faster-than-expected economic recovery and increasing demand for fuel.
Data on Friday showed US employers created jobs in March at the fastest rate in three years. Non-farm payrolls rose 162,000, only the third increase since the US economy fell into recession in late 2007 and the largest since March 2007.
US manufacturing is also expanding at its fastest pace for more than five years, while Chinese manufacturing is picking up and Japanese business sentiment is also improving.
US crude oil for May delivery rose $1.02 per barrel to a high of $85.89 in early Asian trade before slipping back to around $85.37, up 50 cents, by 1130 GMT. The market was closed for a three-day weekend including the Good Friday holiday.
US crude has risen almost 2 percent in the first five days of the quarter, versus a rise of 5.5 percent through the whole of the first three months of the year.
Brent crude rose 40 cents to $84.41 per barrel.
The strong payrolls, positive manufacturing data and signs of rising fuel demand are all likely to support oil prices and cement crude in a new, higher range, analysts say.
Little resistance
Technical analysts, who follow the movement of prices on historical charts, have become more bullish and suggest the oil market could move higher in the next few weeks.
Our take on crude oil prices in the short-term is that we likely will push higher from here, said senior commodities analyst Edward Meir at brokers MF Global.
Technically, there is very little resistance showing on the charts given the upside breakout evident.
Last Thursday, crude oil settled at $84.87 after upbeat US economic data signaled better oil demand ahead, prompting fund buying as the new quarter began.
In industry news, US Tesoro Corp said on Sunday crude oil intake at its Anacortes, Washington, refinery was down to about 70 percent of its 120,000 barrel per day (bpd) capacity after a deadly explosion and fire on Friday.
Sustained demand for gas oil has triggered a surge in buying of crudes with high yields of gas oil and diesel in the Asia-Pacific market as demand led by Chinese buyers absorbed May-loading supplies. -Additional reporting by Nick Trevethan in Singapore.
