LONDON—Crude-oil futures extended their recent climb in London Wednesday, lifted by economic optimism and a weaker dollar.
"When you have a pan-global pickup with a cocktail of better [economic] numbers from Europe, the U.S. and China, that helps," said Ole Hansen, manager of futures and fixed income at Saxo Bank in Copenhagen. Positive data are "increasing the hopes that [economic recovery] will eventually be filtering through to increased [oil] demand," he added.
The front-month March contract on the New York Mercantile Exchange was trading $0.22 higher at $77.45 a barrel. The front-month March Brent contract on London's ICE futures exchange was up $0.37 at $76.43 a barrel.
A weaker dollar tends to support oil because it makes it cheaper for holders of other currencies to buy crude oil. Earlier Wednesday, the euro rose as high as $1.4027 against the dollar on expectations that the European Commission would give formal approval to Greece's budget changes, quelling fears of further strain in the European economy.
Oil has risen more than $5, or 7%, in the last three sessions, helped by increasing optimism over global economic recovery. Economic data—including U.S. gross domestic product, personal income and manufacturing, as well as European Union manufacturing numbers—have lifted risk appetite across broader financial markets, spurring investors to opt for more risky assets, such as commodities and equities.
Macroeconomic data are expected to retain their influence on oil prices this week. The U.S. Automatic Data Processing employment report at 8:15 a.m. ET Wednesday will be of particular interest ahead of Friday's key U.S. employment figures.
Meanwhile, participants were watching developments in Iran, which Wednesday fired a new domestically-produced satellite rocket and announced it had developed several domestic advances in its space program. The satellite announcement comes a day after President Mahmoud Ahmadinejad surprised many Western observers by suggesting that Tehran no longer objected to a long-stalled nuclear-fuel deal at the heart of efforts by Western capitals to rein in the country's nuclear ambitions.
Looking ahead, the oil market will focus its attention on the U.S. Department of Energy's weekly inventory snapshot, due later in the day. Analysts surveyed by Dow Jones Newswires forecast the DOE will report an unchanged level of crude oil inventories, a 1-million-barrel rise in gasoline stocks and an 800,000-barrel decline in distillate supplies.
