SINGAPORE (Commodity Online) : World oil prices extended gains in the first day trade of this month mainly on possible US supply drop on Gulf of Mexico oil slick while Greek bailout deal also helped.
Light sweet crude for June delivery was seen trading at $86.59 a barrel at 12.00 noon Singapore time while Brent crude was at $87.65 a barrel at the same time in London.
Analysts said expectations that the huge oil slick in the Gulf of Mexico could lead to delays in the delivery of crude oil in the US helped the black gold.
Oil also took momentum as investor confidence was lifted after a massive 110-billion-euro bailout package for debt-hit Greece was approved by the European Union.
Euro zone finance ministers on Sunday endorsed the unprecedented bailout to save Greece from bankruptcy and shore up the single currency after Athens agreed to draconian spending cuts.
The U.S. dollar remained flat while the market digested weekend news that China had increased bank cash reserve requirements for the third time this year.
On Friday, US crude for June delivery settled 98 cents higher at $86.15 a barrel, rising for the third day in a row, after hitting an intraday high of $86.50, not far below an 18-month high of $87.09 hit on April 6.
ICE Brent crude for June ended up 54 cents at $87.44, after surging to the day's high of $87.72, just below Brent's year's high of $87.75 reached on Monday.
Benchmark US crude futures rose 2.9 percent for the month, despite bulging US oil inventories, and have gained in 13 of the last 15 months.
April became the first month since October when the front-month contract traded continuously above $80.