Oil prices rose to near $104 a barrel yesterday after a successful Spanish debt sale eased fears over Europe's debt crisis and investors look to US earnings for signs of health in consumer spending.
Benchmark oil for May delivery was up 76 cents to $103.69 (Dh380.85) a barrel by late morning European time in electronic trading on the New York Mercantile Exchange. The contract rose 10 cents to settle at $102.93 in New York on Monday.
Brent crude for June delivery was up 24 cents at $118.92 per barrel in London. Spain sold €3.2 billion (Dh15.3 billion) of 12- and 18-month bonds at an auction Tuesday, a day after a jump in its bond yields sparked concern that it may eventually need an international bailout to avoid a debt default.
Most analysts are forecasting a mild recession in Europe this year, but renewed contagion from the continent's debt crisis could further hurt economic growth.
A strong investor confidence survey in Germany and robust retail sales data in the US, where consumer spending is a huge driver of growth, further buoyed investor sentiment.
Traders will keep an eye on corporate earnings for signs of momentum in consumer spending. International Business Machines (IBM), the world's largest technology services company, Coca-Cola, Goldman Sachs Group, Intel and Johnson & Johnson will report.
Stock markets, which oil traders often look to as a measure of overall investor sentiment, rose ahead of the Wall Street open Tuesday.
Investors are also mulling the impact of meetings last weekend about Iran's nuclear programme. Talks among Iran and six world powers didn't produce any concrete agreements, but negotiators said the tone was better than previous meetings, and the sides agreed to meet again on May 23.