Brent crude futures rose for a third straight session to top $100 a barrel on Monday, lifted by gains in the U.S. stock market.
Trading was choppy, with oil prices closely tracking the U.S. equity market, which moved into positive territory in the afternoon on the back of a one percent gain in Microsoft shares. Earlier, pressure had come from disappointing corporate earnings and lower-than-expected existing home sales.
Brent June crude futures rose 74 cents to close at $100.39 a barrel, down from a high of $101.04. The May U.S. contract, which expired Monday, was up 75 cents to $88.76 after reaching a high of $89.13.
The more heavily-traded U.S. crude contract for June delivery closed up higher than the May contract, gaining 92 cents to finish at $89.19 a barrel after hitting a high of $89.45.
The May contract's expiration on Monday meant trading volume was light, making prices more sensitive to market movements.
Heating oil futures were up nearly 1 percent, but U.S. gasoline was flat due to ongoing weak demand. Analysts said an early morning rally caused traders to sell their long positions.
"Gasoline was the laggard in today's trade as speculators appeared to be using early 3-4 cent gains as an opportunity to further reduce length," Jim Ritterbusch, president at Ritterbusch and Associates in Galena, Illinois, wrote in a research note.
The three days of gains in oil came after a sharp sell off earlier in the month. Brent has lost nearly 9 percent since the start of April on concerns about demand as growth slowed in the United States and China, the world's two largest oil consumers, while recession in Europe deepened.
A negative reading in the Federal Reserve Bank of Chicago's national activity index released on Monday reinforced concerns about U.S. economic growth. That number had been expected to come in positive.
"There's still a sense of trepidation with regard to demand, especially with supplies what they are," said Stephen Schork, editor of The Schork Report.
"We seem to have a lot of inventory and questionable demand, and that's hanging over the market."
SCOURING FOR CUES
Investors will scour data from the United States and China this week for growth cues. The HSBC Purchasing Managers' Index for China for April will be released on Tuesday, while the United States will announce first-quarter GDP growth on Friday.
Economists polled by Reuters expect the U.S. economy to have expanded by 3 percent, up from 0.4 percent in the last three months of 2012.
As worries over a sluggish world recovery persisted, finance leaders of G20 economies edged away from a long-running drive toward government austerity in rich nations, rejecting the idea of setting hard targets to cut national debt.
"The oil market is just trying to settle out, and to see whether the corrective action we saw late last week and this morning is going to continue," said Andy Lebow, senior vice president for energy at Jefferies Bache in New York.
"The question is whether this downtrend we've been in since the first of April is going to break or brake."
Hedge funds and other large speculators cut their net long U.S. crude futures and options positions in the week to April 16, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
A Reuters survey of five analysts taken ahead of weekly inventory reports from the American Petroleum Institute (API) and the U.S. Energy Department's Energy Information Administration (EIA) forecast on average that crude stocks rose by 1.6 million barrels in the week ended April 19.
(Additonal reporting by Robert Gibbons in New York, Ron Bousso in London; Editing by Alden Bentley and Marguerita Choy)