Oil prices rose more than a dollar on Tuesday to a six-month high above $59 a barrel, boosted partly by a weaker dollar and gains on equity markets.
U.S. crude was up $1.14 a barrel at $59.64 a barrel by 8 a.m. EDT. It earlier touched $59.85 a barrel, its highest since November last year. It has risen nearly 20 percent this month.
London Brent crude was up $1.16 at $58.64 a barrel.
Oil is riding the coat-tails of the equity market bounce for now, largely ignoring the build-up in oil inventories, said Harry Tchilinguirian, senior oil analyst at BNP Paribas.
Weakness in oil fundamentals is reflected in elevated inventories, yet the market's price assessment appears to have brushed this aside.
The global economic downturn has hit demand for oil, which has created a massive supply overhang.
There is an estimated 100 million barrels of crude oil stored at sea on tankers. U.S. crude inventories are at their highest in 19 years.
But a rally in global equity markets in anticipation that the economic climate might improve has boosted oil despite its bearish supply/demand picture.
The dollar has also played a part.
The U.S. dollar is slightly weaker which could be spurring a bit of strength, said Tony Machacek at Bache Commodities Ltd.
Oil, which is priced in dollars, tends to rise when the dollar falls.
The global downturn has pushed oil down from a record high above $147 a barrel hit in July to a low in December of $32.40.
Prices have rebounded this year.
U.S. crude is up more than 80 percent from a January low of $32.70 a barrel.
Crude oil demand in China, the world's second-largest energy user, provided support for prices with Chinese customs confirming on Tuesday that crude imports in April rose to reach the second-highest daily rate on record.
But the country's export data proved disappointing.
U.S. oil inventory data due on Wednesday is forecast to show a further rise in crude oil stocks.
U.S. crude stockpiles probably rose for the 10th straight time last week, up by 1.2 million barrels. Distillate stocks are likely to have risen by 1.1 million and gasoline stocks by 500,000 barrels, a preliminary Reuters poll showed.
(Additional reporting by Chua Baizhen; editing by Peter Blackburn)