Crude prices oil futures extended gains in early Asian trade on Monday on short-covering demand, with both Brent and US crude near$32.50 a barrel.
Oil prices surged 10 percent on Friday, one of the biggest daily rallies ever, as bearish traders who had taken out record short positions scrambled to close them, betting the market’s long rout may finally be over.
Brent had climbed 33 cents a barrel to $32.51 as of 0037 GMT after touching $32.69 a barrel earlier the session. It settled at $32.18 a barrel in the previous session.
US crude rose 15 cents at $32.34 a barrel, compared with its session-high of $32.64 and previous settlement at $32.19.
“A change in investor sentiment was the key factor, with speculative short positions in WTI falling from historically high levels the previous week,” ANZ said in a note on Monday.
“Low crude oil prices continue to negatively impact high cost US oil producers. Indeed, recent Baker Hughes data suggested US oil explorers idled more oil rigs this week.”
A massive snowstorm on the US East Coast helped stoke demand for oil for heating, helping push up crude prices. While New York and Philadelphia were getting back to business, Washington was not ready after an historic storm dumped more than 20 inches (51 cm) of snow on the city and nearly three feet (1 meter) in surrounding areas.
Asian stocks gained early on Monday, relieved after seeing Wall Street rally on the back of a sharp rise in crude oil prices. The dollar was steady at 118.75 yen after surging 0.9 percent on Friday, when it touched a two-week high of 118.88.