Oil prices rose on Monday as data showing the U.S. services sector expanded raised hopes of an economic recovery and lifted markets.
Data showed activity in the U.S. service sector expanded in September for the first time since August 2008, growing at a faster rate than expected, while employment in the sector also improved.
The data pushed up U.S. stock markets and helped lift U.S. crude for November by 46 cents to settle at $70.41 a barrel. London Brent fell 3 cents to settle at $68.04 a barrel.
The ISM number came out and pushed equities up and the strength eventually spilled over to (the oil) market, but we keep just pivoting at the $70 area, said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
Slumping fuel demand in the United States and other developed countries sent crude off record highs over $147 a barrel last year.
Traders have been looking to macroeconomic data and equities markets for signs of a potential end of the recession that could boost consumption and draw down high oil inventories.
The service data pushed crude higher in afternoon activity, crude fell in early activity as concerns over an economic recovery resurfaced after data released on Friday showed U.S. employers cut 263,000 jobs in September and the employment rate had soared.
Further pressure on prices came from easing tensions in Iran and Nigeria, which had lent support to prices at times in recent years.
Both Iran and the United States described recent talks over Tehran's nuclear program as productive, with the OPEC nation allowing United Nations inspectors into a uranium enrichment plant.
In a further easing of tension, the last prominent Nigerian militant leader agreed to halt fighting in the oil-producing Niger Delta and surrendered his weapons on Sunday.
A Reuters survey of analysts ahead of weekly U.S. inventory data forecast a 2.1-million-barrel-build in crude oil stocks for the week to October 2 on higher imports and lower refinery runs, while distillate and gasoline stocks were also seen rising.
The U.S. Energy Information Administration (EIA) is scheduled to release its weekly report on Wednesday, while the American Petroleum Institute's report is scheduled for Tuesday.
(Reporting by Matthew Robinson, Robert Gibbons, Gene Ramos in New York, Alex Lawler in London and Fayen Wong in Singapore; Editing by Christian Wiessner)