
By: Reuters | 04 May 2009 | 03:48 PM ET
Oil prices rose to their highest close of the year Monday as investors bet the economic recession would end soon, paving the way for a recovery of ailing world energy demand.
U.S. light, sweet crude rose $1.27, or 2.39 percent, to settle at $54.47 a barrel—the highest since late March. London Brent crude also traded higher.
Oil's gains were encouraged by stronger equities markets and positive economic surveys in big fuel consumer nations China and India, showing their manufacturing sectors grew in April for the first time in months.
"The stock markets are up and there is the hope that we might be seeing some recovery,'' said Dan Flynn, energy analyst at Alaron Trading in Chicago.
Weakness in the U.S. dollar against the euro also supported greenback-denominated commodities markets.
Oil prices have bounced back from five-year lows just above $30 hit this winter on evidence the economic crisis is easing and as OPEC slashes output to trim excess supply.
Oil had also gained on Friday, spurred by improved U.S. consumer confidence as well as a Reuters survey that showed OPEC had delivered around 84 percent of promised curbs of 4.2 million barrels per day since September, around its highest-ever level of output discipline.
OPEC efforts to support the price have been in part offset by the impact of high inventories on land and large amounts of floating storage as traders have made use of a bearish market structure to stockpile oil.

