Dubai: Crude oil traded near the highest in 17 months in New York as growth in US service industries signaled the economy is recovering from the worst recession since the 1930s.
Oil climbed 2.1 per cent amid optimism fuel demand will increase with an economic rebound in the United States.
"We've seen some encouraging economic data the last few days," Toby Hassall, a research analyst at CWA Global Markets Pty in Sydney, told Bloomberg.
"It's keeping the global recovery story in place. Rising prices are reflecting the expectation of improving demand," Hassall said.
Crude oil for May delivery was at $86.40 a barrel, down 22 cents, in electronic trading on the New York Mercantile Exchange.
On Monday, the contract rose $1.75 to $86.62, the highest settlement since October 8, 2008. Futures have gained 9 per cent this year.
"Overall, we are expecting global oil demand growth to be positive this year," Hassall said.
