LONDON (Reuters) - Oil rose above $74 a barrel on Monday, extending its rally to trade near a 10-month high, on optimism that an economic recovery will spur a rebound in energy demand.
A string of positive economic data from various countries and rallying stock markets helped lift oil prices by 9.5 percent last week. Crude is up more than 65 percent in 2009 and may head higher still.
"We could now easily move toward the $80 mark if the growing enthusiasm about the budding economic recovery continues to dominate sentiment," said Edward Meir of MF Global.
"A breakout is taking root as the previous high of $73.38 has now been taken out on a closing basis," he said of U.S. crude.
U.S. crude rose 24 cents to $74.13 a barrel by 0807 GMT. The contract settled up 98 cents at $73.89 on Friday, the highest settlement since October 20. Brent crude gained 27 cents to $74.46.
Oil's gain on Friday followed home sales data for July showing recovery in the U.S. housing market, while Federal Reserve Chairman Ben Bernanke also said the global economy appeared to be recovering.
Growing signs of an economic improvement helped to spur risk appetite, prompting Asian stocks to jump more than 2 percent on Monday, lifting world shares to a 10-month high. European stocks opened higher.
In China, the world's second-largest oil consumer, apparent oil demand rose 3.5 percent in July from a year earlier -- the fourth rise in a row, Reuters calculations from official data showed.
On the weather front, Hurricane Bill brought rain and heavy winds to Nova Scotia in eastern Canada on Sunday, after pounding the U.S. East Coast with heavy seas that killed two people.
Large and dangerous swells generated by the hurricane will continue to impact Atlantic Canada on Sunday night, the Miami-based National Hurricane Center said.
Atlantic Canada is an energy-producing region, exporting oil, gas and refined products. The storm had caused little serious damage as it moved northeast toward the region's offshore oil and gas facilities.
Renewed tensions in Nigeria could also add support to oil.
Nigeria's main rebel group said on Saturday it would resume attacks against Africa's biggest energy industry next month, overshadowing the surrender of hundreds of arms by rebels in a federal amnesty program.
