Oil rose more than $3 per barrel to around $51 on Thursday as rising equities markets bolstered sentiment during a G20 summit which investors hoped would deliver measures to restore global growth.

European shares rose sharply on expectations the economic downturn is moderating, with investors training their sights on the G20 leaders' meeting in London.

Asian stocks shot to a three-month high, building a three-day rally on hopes the U.S. economy may have bottomed out. Tokyo's Nikkei closed up 4.4 percent.

U.S. light crude oil for May delivery rose to a high of $51.53 per barrel, up $3.14, before slipping back to trade around $50.88 by 1125 GMT (7:25 a.m. EDT). London Brent crude was up $2.84 at $51.28 a barrel.

It's managed to pop back above $50 which could be giving the market a bit of a boost from a technical perspective, said Tony Machacek, oil broker at Bache Commodities in London.

There seems to be a G20 factor -- the stock markets are strong and the dollar is weaker. That is also helping the market.

Oil prices fell on Wednesday after U.S. government data showed crude oil stocks rose more than expected to a 16-year high. Gasoline and distillate supplies also unexpectedly rose.


Oil has fallen nearly $100 from a record high above $147 in July 2008 as the economic downturn dents global energy demand.

Qatar's oil minister said oil prices between $40 and $50 per barrel were realistic in view of the global economic downturn, according to comments published on Thursday.

The head of the International Energy Agency said on Thursday the agency was likely to cut its global oil demand forecasts significantly as more bleak economic data emerged.

The possibility for downward revision will be high, Nobuo Tanaka, the agency's executive director, told Reuters in an interview on the sidelines of an energy conference.

We now have data from not only the IMF but the OECD. They all look gloomy. Inevitably, the possible downward revision can be significant but I cannot say how big.

The dollar extended losses against a basket of currencies on Thursday, allowing the euro to rise while the yen approached the 100 mark after the G20 called for more funding for the International Monetary Fund.

The latest draft of the G20 communique, obtained by Reuters, called for an increase of IMF resources by $500 billion, which would make available total funding of $750 billion, G20 sources said on Thursday.

The communique said leaders would submit large hedge funds to supervision for the first time and enhance regulation through a new agency and a beefed-up IMF.

Investors were looking ahead to an expected rate cut by the European Central Bank on Thursday, and to U.S. non-farm payrolls data, both of which could put downward pressure on oil prices.

Forecasters polled by Reuters expect non-farm payrolls to show a fall of 650,000 for March, similar to the 651,000 shed in February.

(Additional reporting by Alex Lawler in London and Osamu Tsukimori in Tokyo; editing by James Jukwey)