Reuters
| 08 May 2009 | 03:27 PM ET
Oil settled above $58 barrel on Friday after positive data on the U.S. economy.
U.S. light, sweet crude traded up $1.92 to settle at $58.63 a barrel.
London Brent crude also traded higher.
"We believe that crude prices are being driven higher by a combination of rising expectations for a faster economic recovery, increased fund flows into commodities and higher utilization at U.S. refineries," said Adam Sieminski at Deutsche Bank in a research note.
The pace of job losses slowed in April in the United States, according to government data, providing further evidence to support the view that the economic climate might be improving.
Wall Street opened higher after the results of stress tests on U.S. banks showed no unexpected weaknesses.
Oil has gained more than 70 percent from a low of $33.55 in February, rallying with equity markets on hopes of economic recovery and also in response to oil supply cuts by the Organization of the Petroleum Exporting Countries.
Macro-economic data on major economies has begun to look less gloomy. U.S. retailers on Thursday posted better-than-expected monthly sales results for a second straight month in April.
German exports posted their first rise in 6 months in March, according to the country's Federal Statistics Office on Friday.
"The risk for investors is that some markets have got ahead of themselves and could be vulnerable should the flow of positive economic data start to deteriorate," Barclays Capital said in a research note.
The bank noted that data on oil demand remains mixed and the market's inventory overhang is still huge.
"If the recent bout of positive sentiment subsides, prices might well go through a phase of consolidation in the mid-50s," it said.
