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Brent crude futures for April gained 41 cents, or 0.7%, to
$60.97 a barrel by 1000 GMT.
U.S. West Texas Intermediate crude (WTI) for March was at $58.25
a barrel, up 28 cents, or 0.5%.
"We attribute the latest price surge first and foremost to
financial market factors such as the considerable investor
optimism and the again weaker U.S. dollar, and expect prices to
correct," Commerzbank analysts said in a note.
The dollar was down 0.4% against a basket of currencies, making
dollar-priced commodities more attractive to holders of other
currencies.
Top exporter Saudi Arabia is squeezing supply in February and
March, on top of cuts by producers in the Organization of the
Petroleum Exporting Countries and their allies, prompting
forecasts of a supply deficit this year.
Additionally, Libyan oil production has fallen to 1.04 million
barrels per day (bpd) from 1.3 million bpd late last year due to
an ongoing strike by the Petroleum Facilities Guards, a Libyan
oil source said on Monday.
Signalling no swift return of Iranian barrels into the market,
Tehran and Washington appeared to be in deadlock over a
resolution of sanctions on the OPEC member.
Investors are also pinning hopes on an oil demand recovery when
COVID-19 vaccines take effect, while a weak dollar has helped to
shore up the price of commodities.
Investors are looking ahead to the U.S. weekly oil inventories
data due later on Tuesday. [API/S]
U.S. crude and gasoline stockpiles probably rose last week,
while distillate stocks were seen down, a preliminary Reuters
poll showed on Monday. [EIA/S]
(Additional reporting by Florence Tan; editing by David Evans)
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