Oil rises on bullish US manufacturing data
Oil rose the most since late February after a report said that United States (US) factories have cranked into a higher gear.
Manufacturers are big users of diesel fuel, so increased factory activity usually means increased demand for diesel.
Benchmark US crude increased Monday by $2.21 to $105.23 per barrel in New York. It was the biggest gain since February 21. Brent crude rose by $2.55 cents to $125.43 per barrel in London.
Meanwhile, natural gas futures recovered after falling to a 10-year low. Futures gained 2.6 cents to $2.15 per 1,000 cubic feet. Natural gas prices have plummeted because of a production boom that could push US supplies close to their maximum capacity later this year.
US manufacturing grew in March at a faster pace than February, according to the Institute for Supply Management, a trade group of purchasing managers. US factories added 100,000 jobs in the past three months to help fill a growing list of new orders.
China's manufacturers also gained momentum in March, according to a report published over the weekend.
"If they're producing, that means they're selling things," PFGBest analyst Phil Flynn said. "It means the economy is improving. We could be getting more jobs out of it in the future, and that gets people excited."
The price of oil also reflects ongoing tensions over Iran's nuclear programme. Iran exports 2.4 million barrels of oil each day.