Oil continues rally above $91 (Reuters) (03-01-2011)

SINGAPORE – Oil continued a rally above $91 a barrel on Monday hoping for a global economic recovery, which could send prices above $100 later this year.

U.S. crude for February delivery rose 40 cents to $91.78 a barrel by 0715 GMT (2:15 a.m. ET) in holiday-thinned trade, after settling up $1.54 a barrel at a 2010 high of $91.38 a barrel on Friday. That marked the largest end-year price since 2007.

London Brent was up 33 cents to $95.08 a barrel, after rising $1.66 on Friday to settle at $94.75 a barrel, its highest end-December settlement since 2007 and up nearly 22 percent on the year.

The Institute for Supply Management (ISM) is about to publish later in the day its high – profile measure of U.S. national factory activity, showing the pace of expansion in the manufacturing sector was quicker in December.

Crude prices are about to correct to $83.85 per barrel before rising to $96 in the first quarter of the year, according to a Reuters analysis, while this week the crude is possible to range of high - $80s to $93.50.

Upbeat U.S. data on jobless claims and regional manufacturing activity last week had already buoyed expectations the economy had gained a firmer footing as the year ended, and was on track for a stronger performance in 2011.

The U.S. dollar ended a volatile year on Friday a bit firmer than where it began, with investors gearing up for gains in early 2011 on expectations the U.S. economic recovery was gaining momentum.

The S&P's best December since 1991 with a quiet and little-changed session on Friday as investors found no reason to make big bets ahead of the New Year.

Source: Reuters