Oil prices rose almost three per cent Monday, lifted by a weaker U.S. dollar, renewed economic optimism and end-of-quarter book-squaring.
The dollar index fell against a basket of currencies, helping to boost commodity prices, including oil.
Trading sources reported end-of-quarter and end-ofmonth buying ahead of the Easter holiday weekend and several said there could be some lift to oil from concerns about a suicide bombing in the Moscow metro.
"The explosion in Russia is a culprit along with the weak dollar and there is end-of-quarter book-squaring and window-dressing on Wall Street," said Stephen Schork, president at the Schork Group in Villanova, Pa.
U. S crude for May delivery rose $2.17, or 2.71 per cent, to settle at $82.17 US a barrel, ending a three-session losing streak and trading as high as $82.78, the highest front-month crude price since March 17.
London Brent crude gained $1.88 to settle at $81.17.
The euro strengthened against the dollar as debt-stricken Greece sold seven-year bonds and after last week's eurozone agreement on emergency financial aid for Greece.
Strong U.S. and European economic data and robust Asian indicators helped to lift equity markets. Eurozone economic sentiment increased more than expected in March.
U.S. consumer spending rose as expected in February for a fifth straight month, but stagnant incomes pushed savings to their lowest level since October 2008.
U.S. stocks closed higher Monday as Greece launched its sovereign bond issue and with energy shares helping fuel the rise.
"As is often the case when prices spike by more than a couple of percentage points, several factors combined to ignite an influx of speculative capital into the long side," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.
Having traded intraday above $80 for the past 27 trading sessions, some traders said oil prices appear to be ready for a breakout from current levels.
However, with crude oil demand fundamentals continuing to clash with the positive macroeconomic data, analysts said prices could struggle to break out above the $84 mark -- with the U.S. crude oil 2010 peak from January at $83.95 a barrel.
