Oil prices rose on Monday amid hope of further stimulus on both sides of the Atlantic, with U.S. crude leading gains amid signs of improving demand and growing exports.
Equities rallied and the dollar faltered, further fuelling oil gains as traders looked ahead to key central bank meetings. The Federal Reserve is expected to maintain its quantitative easing program when it meets this week, and the European Central Bank (ECB) is seen cutting interest rates on Thursday.
"We'll see if the measures are enough to stimulate economic growth," said Gene McGillian, an analyst with Tradition Energy in Stamford, Connecticut. "If not, the market's headed back down again."
New York Mercantile Exchange June crude futures ended the day $1.50 per barrel higher at $94.50, aided by a break above the 40-day moving average on a continuation chart.
Brent crude oil futures, the international benchmark, settled 65 cents higher at $103.81 per barrel, after hitting a low of $102.57.
The spread between U.S. WTI and Europe's Brent remained in focus, narrowing a further 85 cents to $9.31 a barrel, the lowest since January 2012 on a settlement basis, as government data showed signs of tightening U.S. market conditions.
U.S. crude oil exports doubled in February to a 13-year high of 124,000 barrels per day, on the back of stronger exports to Canada. U.S. oil demand also rose.
CHINA MANUFACTURING DATA
The oil market awaits an indication of how China's economy is faring, analysts said.
The world's second-largest oil consumer is expected to report that manufacturing data for April edged up from March, a Reuters poll found.
A private-sector survey of purchasing managers sponsored by HSBC last week showed activity in China's industrial sector dipped in April as new export orders shrank, spooking investors.
"There has been some concern that with an unstable Europe being one of China's biggest export markets, this could have a negative impact on the PMI number," said Ben Taylor, sales trader at CMC Markets.
U.S. Commerce Department data showed that consumer spending rose 0.2 percent in March, attributed to utility costs as weather remained colder than normal last month, not to spending on goods, a stronger measure of consumer demand.
U.S. first-quarter GDP grew at a 2.5 percent annual rate, slower than the 3 percent forecast by analysts but more robust than the 0.4 percent pace in the fourth quarter.
But brokers said rising U.S. equities helped boost crude prices.
The U.S. stock market rose as Italy's new prime minister said he would promote job growth and eschew austerity measures.
The news also drove the U.S. dollar lower against the euro, a move generally supportive of higher oil prices. (Additional reporting by Christopher Johnson in London and Robert Gibbons in New York; Editing by Dale Hudson)