Oil rose toward $75 a barrel on Monday, within sight of a 10-month high, supported by optimism that an economic recovery will spur a rebound in global energy demand.
Euro zone industrial new orders rebounded more than expected in June against the previous month, adding to signs of recovery. China's implied oil demand rose 3.5 percent in July from a year earlier.
U.S. crude rose 52 cents to $74.41 a barrel by 1305 GMT (9:05 a.m. EDT). The contract settled up 98 cents at $73.89 on Friday, the highest settlement since October 20. Brent crude gained 18 cents to $74.37.
The Chinese news was good and we had some positive news out of Europe as well, said Rob Montefusco, a trader at Sucden Financial in London. Technicals are pointing upwards.
In a further indication the recession is waning, a report from the Federal Reserve Bank of Chicago showed on Monday U.S. economic activity improved again in July from extremely weak levels earlier this year.
A string of positive economic data from various countries and rallying stock markets helped lift oil prices by 9.5 percent last week. Crude is up more than 65 percent in 2009 and may head higher still, according to analysts.
We could now easily move toward the $80 mark if the growing enthusiasm about the budding economic recovery continues to dominate sentiment, said Edward Meir of MF Global.
Growing signs of economic improvement helped to spur risk appetite, prompting Asian stocks to jump more than 2 percent on Monday. European stocks hit a 10-month peak and Wall Street was expected to move up.
Renewed tensions in Nigeria could also add support to oil.
Nigeria's main rebel group said on Saturday it would resume attacks against Africa's biggest energy industry next month, overshadowing the surrender of hundreds of arms by rebels in a federal amnesty program.
(Reporting by Alex Lawler and Fayen Wwong in Perth; Editing by Jon Boyle)