Brent oil prices hit a high for the year above $40 a barrel yesterday after data showed a smaller-than-expected build in US crude stockpiles, helping US stocks extend recent gains.

Brent was last up $1.87 at $40.59, while US crude rose $1.58 to $37.50.

That lifted shares of energy stocks, which led gains in the S&P 500. The energy index climbed 1.5 per cent. Biotechs also rallied, helping to support the broader market.

The Dow Jones industrial average was up 65.23 points, or 0.38 per cent, to 17,072, the S&P 500 had gained 3.86 points, or 0.19 per cent, to 2,003.85 and the Nasdaq Composite had added 9.78 points, or 0.21 per cent, to 4,726.80.

MSCI’s all-country world stock index edged up 0.2 per cent. In Europe, the pan-regional FTSEurofirst 300 index provisionally closed down 0.3 per cent.

The euro tumbled against the dollar before Thursday’s ECB meeting at which policymakers are expected to cut interest rates further into negative territory.

The euro was 0.5 per cent lower at $1.0950 and down 0.7 per cent at 124.34 yen. The US dollar index was down 0.2 per cent.

“The US economy is doing relatively well. The dollar will likely hang on to its gains right now,” said Sireen Harajli, currency strategist at Mizuho Corporate Bank in New York.

In the US bond market, US Treasury yields rose in volatile trading as traders increased bets the Federal Reserve will raise interest rates this year in the wake of a strong February jobs report and ahead of an ECB meeting.

Friday’s payrolls data showed 242,000 jobs were created last month and assuaged fears the US economy could be headed into recession. It also revived prospects of further Federal Reserve interest rate hikes this year, something markets had priced out.

The benchmark 10-year note’s yield rose to 1.918 per cent, its highest in just over a month.

It was last down 9/32 in price to yield 1.9127 per cent, up from 1.883 per cent late on Friday.