LONDON (SHARECAST) - Oil prices bagged decent gains on Monday, inching closer to $90 a barrel, as optimism about demand continues.
Good economic data across the globe has boosted hopes about the recovery. Markets were also relieved that China refrained from increasing interest rates at the weekend.
Crude oil for January delivery closed 82 cents higher at $88.61 a barrel on the New York Mercantile Exchange, the highest close in a week. Earlier in the session crude had risen above $90 a barrel before returning back below the psychologically important mark.
A report by Goldman Sachs predicting crude prices will rise above $100 a barrel within six months and $105 within a year also bolstered sentiment. US demand is expected to recover while global inventories are expected to fall, Goldman Sachs said in its 2011 commodities outlook on Monday.
Oil prices have risen 11% this year on hopes the economic recovery will increase demand for fuel. The weaker dollar also underpinned demand for oil. Meanwhile later this week US weekly supply data is expected to show US crude stockpiles have dropped to their lowest level since July.
Gold prices charged past $1,400 an ounce on Monday after China released higher than expected inflation figures.
Gold for February later retreated by still settled up $13.1 at $1,398 an ounce on the Comex division of the New York Mercantile Exchange.
