LONDON -- Oil surged for a fifth day on to a 2009 high above $US75 a barrel, boosted by a weak dollar and optimism about a global economic rebound that will lead to higher energy demand.
The US dollar, which fell to its lowest in more than a year against a basket of currencies, also boosted gold, which hit a record. Dollar weakness makes oil and bullion more affordable for non-dollar holders.
"The recent rise in oil prices is not driven by fundamentals but by financial market developments and hopes that oil demand will recover sooner rather than later," said Carsten Fritsch, analyst at Commerzbank. "But we still need some confirmation of this hope."
US crude jumped 95 cents to $US75.10 a barrel by 0154 AEDT, after climbing to $US75.32, the highest this year, earlier in the session. Brent crude rose 67 cents to $US73.07.
Oil has more than doubled from below $US33 in December driven in part by hopes of economic recovery, a rally that many in the industry have seen as running ahead of weak oil demand, high inventories and abundant supply.
Now though, there is more acceptance that oil use is on an upward track. Producer group OPEC on Tuesday became the latest forecaster to bump up global oil demand estimates for this year and 2010.
"The market is increasingly recognising that oil demand is indeed recovering," said Mike Wittner at Societe Generale. "That's based on two things -- stabilisation in US 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 $US5 in the past week. The dollar-inflation story has been a part of that."
Chinese imports
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 China's oil imports in September.
And Euro zone industrial output accelerated month-on-month in August, while July production was revised upwards, providing evidence the area's economy is likely to have started growing in the third quarter.
Earnings are due from a number of major US firms this week, and the oil market is tracking results for signs of economic rebound.
JPMorgan Chase & Co reported a sharp rise in third-quarter results as underwriting revenue at its investment bank offset deeper losses on credit cards and other consumer loans.
Cold weather in the United States has also supported prices. Heating demand will be higher than normal this week, the National Weather Service said on Monday.
US inventory data from the American Petroleum Institute was due later on Wednesday, the latest indication of demand in the world's top consumer. A Reuters poll forecasts a 700,000-barrel rise in crude stocks.
Analysts who use past price moves to predict future direction said a further rally would depend on US crude, also known as WTI, closing above $US75 resistance.
"The advance in WTI is in our view purely technical and dollar linked -- hence reversals can be sharp when and if the dollar stops to fall off the cliff," said Olivier Jakob, analyst at Petromatrix.
