Oil futures rallied Wednesday, taking cues from a rebound in global equity markets.
Light, sweet crude for October delivery rose traded up $1.81, or 2.1%, to $87.80 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe traded up 95 cents, or 0.9%, to $113.84 a barrel.
Futures advanced on the back of a stock-market recovery in Europe and Asia, and signs that U.S. markets will start the day higher. In Europe, the Stoxx Europe 600 rose 2.2% after a German court upheld the first Greek bailout package. Japan's Nikkei rose 2%.
"You're getting some positive input from the equity market," said Gene McGillian, broker and analyst at Tradition Energy in Stamford, Conn. "Whether or not we'll see strength to push through last week's highs remains a question."
Dow Jones Industrial Average futures climbed 110 points to 11238.
Crude futures are closely tracking major equity indexes, which many traders have come to view as a proxy for broader economic sentiment.
Worries about the sluggish global recovery have weighed on oil futures in recent months. Reduced economic activity typically leads to weaker oil demand, as drivers spend less time on the road and buy fewer products made from petroleum.
On Tuesday, Nymex crude futures ended down 0.5%, following U.S. equities as concerns about global growth deepened.
Later this week, market participants are likely to take additional cues from separate economic speeches by President Barack Obama and Federal Reserve Chairman Ben Bernanke. U.S. oil inventory reports from the American Petroleum Institute and the Department of Energy will be closely eyed as well.
Both surveys are due a day later than usual--Wednesday and Thursday, respectively--due to Monday's Labor Day holiday.
U.S. oil futures have fallen from highs near $115 a barrel reached in May, amid signs that the economic recovery has stalled. Brent crude, however, has found support from uncertainty over the return of Libyan exports and production problems in the North Sea, where the crude is sourced.
Brent soared to a record premium above $27 a barrel over the Nymex contract Tuesday, following reports of delays to September cargoes of North Sea Forties crude.
Front-month October reformulated gasoline blendstock, or RBOB, recently traded up 1.97 cents, or 0.7%, to $2.8423 a gallon. October heating oil traded up 1.86 cents, or 0.6%, to $3.0288 a gallon.