Oil prices rose Tuesday as many Asian stock markets bounced back from a weeklong slide, and strategists pointed to robust demand for gasoline and falling petroleum inventories.
"Gasoline demand is now much stronger than expected than at beginning of this year. This should be pushing prices up further," said Tetsu Emori, chief commodities strategist with Mitsui Bussan Futures in Tokyo.
Light, sweet crude for April delivery rose 28 cents to US$60.35 a barrel in electronic trading on the New York Mercantile Exchange, late afternoon in Singapore. The contract fell 2.5 percent Monday to settle at US$60.07 a barrel, the lowest for a front-month contract since Feb. 21.
April Brent crude added 31 cents to US$60.85 a barrel on the ICE Futures exchange in London.
Turmoil in global financial markets had weighed on oil prices, partly due to some concerns that global growth may be slowing. But as Asia markets recovered Tuesday, traders also bid up oil contracts.
In their reports to clients, several investment banks were unfazed, pointing to fundamental strength in the oil market.
"Our view is that last week's equity gyrations are nothing more than a healthy correction and there is certainly little reason for markets to begin factoring in any significant weakening in commodity market fundamentals as a result," said Kevin Norrish at Barclays Capital.
Global demand for oil remains strong, said Victor Shum of Purvin & Gertz in Singapore, amid forecasts for strong seasonal demand for gasoline in the upcoming peak summer driving season in the Northern Hemisphere.
The U.S. government reported last week that stockpiles of gasoline and distillates, which include heating oil and diesel fuel, dropped by a larger amount than analysts had forecast. Meanwhile, demand for products over the last four-week period rose by 7.5 percent from the same period last year.
Escalating tensions between Iran and the United States are also supporting oil prices. Washington is pushing for tougher U.N. sanctions on Tehran over its failure to comply with demands to halt its uranium enrichment program.
Iran however said Monday that it would take part in at least part of an international conference on Iraq in Baghdad with the United States, to discuss calming the conflict in Iraq if attended by both countries, it would be the first public U.S.-Iranian meeting in nearly three years, reports AP.
In other Nymex trading, heating oil futures rose 0.54 cent to US$1.7302 a gallon (3.8 liters) while natural gas prices rose 4.1 cents to US$7.295 per 1,000 cubic feet.
Russian President Vladimir Putin announced a possibility of a real revolution that may happen in world economy in the coming years to put an end to the monopoly of large Western banks