Oil surged for a fifth day on Wednesday to a 2009 high above $75 a barrel, boosted by a weak dollar and optimism about a global economic rebound that will lead to higher energy demand.
The weak dollar, which fell to its lowest in more than a year against a basket of other currencies, also boosted gold, which hit a record. Dollar weakness makes oil and bullion more affordable for non-dollar holders.
"There's a lot of positive sentiment right now, but that's largely driven by the softer dollar," said Mark Pervan, senior commodity strategist at ANZ Bank in Melbourne.
"Whether the rally is sustainable depends on further dollar weakness. If there is, we could head toward the $75 to $80 range, but $75 would be a key resistance level."
U.S. crude jumped 79 cents to $74.94 a barrel by 6.20 a.m. EDT, after climbing to $75.15, the highest this year, earlier in the session. Brent crude rose 72 cents to $73.12.
Oil has more than doubled from below $33 in December driven in part by hopes of economic recovery, a rally that some in the industry argued had run ahead of weak oil demand, high inventories and abundant supply.
Now, there is more acceptance that oil use is getting stronger.
"The market is increasingly recognizing that oil demand is indeed recovering," said Mike Wittner at Societe Generale. "That's based on two things -- stabilization in U.S. demand and strong growth in Chinese demand."
"But it's a bit of a stretch to say that slowly improving fundamentals have caused oil prices to go up by $5 in the past week. The dollar-inflation story has been a part of that."
CHINESE GROWTH
Asian and European data on Wednesday supported a more optimistic view of the economy.
Chinese trade figures provided fresh evidence of recovery in the world's second-largest oil user, while oil data showed strong year-on-year growth in oil imports in September.
And Euro zone industrial output accelerated month-on-month in August and July production was revised upwards, providing evidence the area's economy is likely to have started growing in the third quarter.
Producer group OPEC on Tuesday became the latest forecaster to bump up global oil demand estimates.
Earnings are due from a number of major U.S. firms this week, and the oil market is tracking corporate results closely for signs of a broad economic rebound.
Tech bellwether Intel Corp's (INTC.O) quarterly outlook and results shattered expectations on Tuesday, boosting its shares and fuelling optimism over a wider recovery in the sector.
