Oil rallied above $81 a barrel on Thursday, extending late gains the previous day, supported by strength in global equity markets.
U.S. crude rose 72 cents to $81.02 by 0844 GMT, having soared more than $1 in earlier trade to $81.36. London Brent crude gained 58 cents to $78.01.
Dealers said oil's momentum was due in part to soaring stock markets in Asia, with European shares expected to follow suit amid signs of stabilization in money and credit markets.There was no fresh oil market news driving the sharp gains.
"Adding another dollar this morning is very puzzling," said a senior trader at an investment bank, adding the gains could evaporate after European trading picked up.
Prices ended higher on Wednesday in volatile trading after investors shifted focus from bearish oil inventory data to a tropical depression in the southwest Gulf of Mexico.
Forecasts showed the storm moving westward away from Mexico's main oil platforms in the Bay of Campeche, but traders are alert to the potential for bad weather to shut output.
"Weather is always a factor at this time of year, the depression is probably supporting prices as it has the potential to disrupt supply," said David Moore of Commonwealth Bank.
Weather worries took precedence over a government report released on Wednesday showing U.S. crude stocks rose last week by 1.8 million barrels, despite expectations of a draw. "The increase in inventories was unexpected, but more surprising is that oil bounced back," said Moore.
U.S. crude oil stocks rose last week on an increase in imports and as refinery operations eased to their slowest pace since March, but some analysts expect them to resume falling next week, partly due to Gulf of Mexico disruption.
Oil has been under pressure since last week's peak of $83.90, with concerns over economic growth and profit-taking pushing down prices.
(Reuters)