Oil prices rose above $53 per barrel today, buoyed by expectations that efforts by the world's rich nations to stimulate their economies may help end the global downturn sooner than expected.
Japan said it planned to spend at least $100 billion more to help its economy survive the global crisis, as investors seized on signs that markets may have bottomed to buy stocks and commodities.
In a sign appetite for risk is increasing, gold prices fell more than 2 percent, slipping towards a two-and-half-month low, and stock markets rose.
Japan's Nikkei stock average hit a three-month closing high and European shares opened higher, tracking a late rally in the United States on Friday.
U.S. light crude for May delivery was up 90 cents at $53.41 a barrel by 0833 GMT. The contract ended 13 cents lower to settle at $52.51 on Friday, as a bounce in Wall Street countered an earlier slide set off by gloomy jobs data.
London Brent crude rose 80 cents to $54.27 a barrel.
Oil traders said agreement last week by G20 leaders on a $1.1 trillion deal to combat the global economic crisis had raised expectations that the downturn might not be as severe as anticipated, but this optimism could be short-lived.
PIXIE DUST
"The pixie dust that President Obama and the G20 sprinkled on markets last week is still working its magic," said Christopher Bellew, oil broker at Bache Commodities in London.
"But I think that will blow away as people realise that there is no quick fix for this recession. I do not think the oil market will advance much further and I don't think the recent stock market strength will be sustained."
Although crude oil prices have risen roughly 16 percent so far this year, they are almost 60 percent below their high of more than $147 a barrel last July.
U.S. stocks rose on Friday, with the Dow closing out its best four-week winning streak since 1933, lifted by robust results from Research in Motion and after Federal Reserve Chairman Ben Bernanke said the central bank would do everything it could to stabilise banks.
The gains came despite government data showing U.S. employers slashed 663,000 jobs in March, lifting the unemployment rate to a 26-year high of 8.5 percent. Some analysts said the jobless number came in within expectations and had already been priced in.
Analysts said investors may attempt to push oil towards the $55 mark this week, should U.S. stocks rally further on signs that the economic slump is abating and if earnings season does not get off to a rocky start.
Oil rose nearly 11 percent last month and snapped two straight quarters of double-digit decline to rally 9.5 percent in the first quarter, thanks to a rally in global stock markets and OPEC's production cuts.
Crude oil speculators on the New York Mercantile Exchange decreased net long positions in the week to March 31, data from the U.S. Commodity Futures Trading Commission showed on Friday.