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Tokyo. Crude oil extended gains to an eight-week high above $82 a barrel on Monday, buoyed by a weaker dollar and signs of an economic recovery in top oil consumer, the United States.

Traders and analysts say currency movements could dominate oil prices as the strength of demand remains unclear during the recovery. The dollar index, which measures the greenback against a basket of currencies, edged down 0.32 percent.

Crude for April delivery was up 83 cents at $82.33 a barrel after touching $82.41 earlier, the highest since Jan. 11. London Brent crude was up 86 cents at $80.75 after hitting $80.78 earlier, the highest since Jan. 12.

New York crude has traded in a range of $69 to $84 over the past few months amid uncertainty about the speed of the global economic recovery.

“In the past few days, market moves have been led by technicals,” said Tomokazu Amano, an analyst at Mitsubishi Corporation Futures and Securities in Tokyo. “Now that $80 or higher is here to stay, we are seeing an influx of speculative money from funds and others.”

Money managers extended their net long crude oil futures positions on the New York Mercantile Exchange in the week to March 2, the Commodity Futures Trading Commission said on Friday.

The key speculator group hiked net long positions to 144,058 during the week, up from 132,504 in the week to Feb. 23.

Oil also got support from higher Asian shares, which tracked a rally in the US markets to an 18-month closing high on Friday. Japan’s Nikkei average and South Korean shares closed up more than 1.5 percent.

“The strength in Asian shares was providing support, but it’s difficult to grasp the market’s direction,” said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo.

“Although the market hit $82 [on Monday] helped by the US jobs report, it is difficult to buy further.”

Oil also got support after news that China, the world’s second-biggest oil consumer, will build two strategic oil reserve bases in Guangdong province at Huizhou and Zhanjiang.

 

Reuters