Oil rose above $90 a barrel in Asia for the first time since May after the US Government said oil demand is on the rise and regional stock markets rebounded on strong earnings and improved US economic data.
Benchmark crude was up 47 cents at $90.34 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange.
The contract rose 65 cents to settle at $89.87 per barrel in New York yesterday.
Brent crude was up 76 cents at $105.92 a barrel on the ICE futures exchange in London.
The Energy Information Administration reported that average oil demand increased last week in the US for the third week in a row. Oil demand had been down most of the year, when compared with 2011, as manufacturing activity slowed and drivers cut back on travel.
EIA’s weekly petroleum report also noted a surprise drop in gasoline supplies last week as refineries pulled back on production. Oil supplies also fell, though the drop was less than what analysts expected.
Oil is likely to remain near $90 in the near term due to signs of improving demand in the EIA report, energy analysts at the The Schork Group said in a report.
Also helping the sentiment were gains in Asian stock markets after strong earnings from IBM and Ebay and a Commerce Department report that US home builders broke ground last month on the most homes and apartments in nearly four years.
In other futures trading, heating oil was up 0.8 cent to $2.885 a gallon and gasoline added 0.7 cent to $2.782 a gallon. Natural gas fell 1.8 cent to $2.955 per 1,000 cubic feet.