NEW YORK (Reuters) - Oil rose for the first time three days, climbing above $81 a barrel on Monday as a new U.S. healthcare reform bill boosted Wall Street and the dollar weakened slightly against foreign currencies.
President Barack Obama’s landmark healthcare overhaul brought relief to investors and sent shares in the healthcare sector higher after a year of volatile trading on concerns over the burdens from reform.
The dollar weakened slightly against a basket of foreign currencies .DXY, after it had strengthened against the euro earlier Monday, on uncertainty about aid for debt-stricken Greece. A weaker dollar can indicate investors are moving money into assets deemed to carry more risk, such as commodities and equities.
U.S. crude for April delivery, which expired on Monday, rose 57 cents to settle at $81.25 a barrel, after falling to as little as $78.57 earlier in the day. Brent crude for May delivery rose 66 cents a barrel to settle at $80.54 a barrel.
“The (oil) market is following gains in the S&P (stock) index,” said Tim Evans, energy analyst at Citi Futures Perspective in New York. “Oil fundamentals really have not improved, so it’s all about where the money flows are going right now.”
The S&P index was up 0.7 percent in afternoon trading.
Oil prices fell in two consecutive weeks through Friday, falling further from a 2010 high of $83.95 a barrel reached in January.
While crude inventories have been falling in industrialized countries and global demand is expected to rise, supply remains ample. A preliminary Reuters poll on Monday showed that analysts expect U.S. crude oil stocks probably rose 1.3 million barrels last week after crude imports increased. Official supply and demand figures will be released Wednesday by the U.S. Energy Information Administration.
Americans drove less in January, covering 1.6 percent less vehicle miles than in the same month of 2009, according to figures released on Monday by the Department of Transportation. The fall in miles driven was the first monthly decline in a year.
A Greek fiscal crisis has helped make investors more cautious of risky assets in recent weeks, boosting the dollar against the euro. European leaders sent out conflicting signals at the weekend over aid to Greece, with Germany urging Athens to solve its debt problems alone and Italy backing EU support. EU leaders will meet on March 25-26.
The latest indication of China’s growing oil demand is supportive of oil prices. Implied oil demand in the world’s second-biggest energy user rose 19.4 percent in February over a year earlier, as quick economic growth boosted fuel use by industries and motorists.
Domestic commercial crude oil inventories in China rose 5.2 percent in February over January to 28.2 million tonnes, China OGP reported on Monday.
Additional reporting by Joshua Schneyer, Gene Ramos and Robert Gibbons in New York, Alex Lawler in London, Seng Li Peng in Singapore; Editing by Lisa Shumaker